Bond Yield Calculator
Calculate bond yield to understand returns from fixed income securities. Compares bond performance with other investment options.
Bond Yield Calculator
Result
How it works
Formula Used
YTM ≈ [Coupon + (FV - Price)/n] / [(FV + Price)/2] FV = face value, Price = current market price, n = years to maturity
Smart Tips
- YTM assumes you hold the bond to maturity
- Bond prices move inversely to interest rates
- Tax-free bonds have lower yields but post-tax return is higher
Best Used For
Evaluate government securities, corporate bonds, NCDs
FAQs
Why do bond prices fall when interest rates rise?
Bond prices and interest rates move in opposite directions. If new bonds offer 8% yield but your bond pays 7%, its price drops so buyers get equivalent yield. If you sell before maturity, you get less money.
Should I invest in bonds or fixed deposits?
FDs are safer (bank-backed, insured up to ₹5L). Bonds offer higher yield but have price volatility. For tax efficiency, tax-free bonds > FDs. For capital preservation, FDs > bonds. Mix based on your risk appetite.
What's the difference between coupon yield and YTM?
Coupon yield: annual interest / current price. YTM: total return if held to maturity (includes gain/loss when price differs from face value). YTM is more accurate for total return analysis.
Can I sell bonds before maturity?
Yes, if they're traded on NSE/BSE. But you'll face market price fluctuations. If interest rates rose, bond price falls and you get less. Government securities are liquid, corporate bonds less so.
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