Calculate Current Yield, YTM, YTC, Yield to Worst & Macaulay Duration for any bond — premium, discount, or callable. USD/INR/AED, real-time, no signup.
Free bond yield calculator that solves Yield to Maturity (YTM) via bisection from the current market price, computes Current Yield, Yield to Call (YTC) for callable bonds, Yield to Worst (the lower of YTM and YTC), and Macaulay/Modified Duration so you can see exactly how sensitive the bond is to interest-rate shifts. Supports annual or semi-annual coupons, identifies whether the bond trades at premium, discount or par, plots the full cashflow timeline, and compares all yield measures side by side. Inputs in USD, INR or AED.
Current Yield is the simplest measure: annual coupon divided by current market price. It tells you the income yield today but ignores any capital gain or loss at maturity. Yield to Maturity (YTM) is the discount rate that makes the present value of all future coupons plus the face-value redemption exactly equal to the bond current market price. Because that equation has no closed-form solution, this calculator uses a bisection algorithm — narrowing in on the rate that prices the bond correctly to within a fraction of a basis point.
A bond price moves inversely to market interest rates. When rates rise above the bond coupon, the bond trades at a discount (below face value) so its YTM matches what new bonds offer. When rates fall below the coupon, the bond trades at a premium (above face value) and YTM drops below the coupon rate. At par, coupon rate equals YTM. Discount bonds deliver a capital gain at maturity on top of coupons, while premium bonds carry a built-in capital loss as the price drifts toward face value over time.
Duration is the single most important risk metric for bond investors. Macaulay Duration is the weighted-average time to receive the bond cashflows. Modified Duration converts that into a price-sensitivity number: a Modified Duration of 6.5 means the bond price will fall about 6.5% if yields rise 1%, and rise about 6.5% if yields fall 1%. Long-dated, low-coupon bonds have the highest duration and are the most volatile when central banks shift rates.
Current Yield is simply the annual coupon divided by today market price — a snapshot of income return. YTM is the true compound return you earn if you hold the bond to maturity, accounting for every coupon plus the capital gain or loss when the bond redeems at face value. YTM is the standard measure used to compare bonds.
A bond trades at a premium when its price exceeds face value (coupon rate is higher than market yields, so the bond is more valuable). It trades at a discount when its price is below face value (coupon is lower than current market yields). At par the price equals face value. Discount bonds offer capital gains at maturity; premium bonds carry a built-in capital loss.
Macaulay Duration is the weighted-average time (in years) until you receive the bond cashflows, weighted by the present value of each payment. It measures interest-rate sensitivity: a duration of 7 years means the bond price will fall roughly 7% if market yields rise by 1% (using Modified Duration). Longer-duration bonds are more volatile when rates change.
Yield to Worst (YTW) is the minimum of YTM and YTC across every possible call date — the lowest yield you might actually receive. For non-callable bonds YTW equals YTM. For callable bonds trading at a premium, the issuer will likely call when rates fall, so YTW is the realistic number to plan around. Always compare callable bonds on YTW, not YTM.
A callable bond gives the issuer the right to redeem early at a preset call price. If interest rates fall, the issuer refinances cheaper and calls your bond — capping your upside. This is why callable bonds typically offer a higher coupon than comparable non-callable bonds (call premium). Use Yield to Call to see your return if called, and Yield to Worst as your conservative planning number.
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