Home › Finance Formulas › Current Yield Formula for Bonds
Current Yield Calculator
Current yield is the annual coupon a bond pays divided by the price you pay for it today. It is the bond equivalent of a stock’s dividend yield: it tells you the cash income you get each year relative to your investment, ignoring any gain or loss when the bond matures.
Formula
Where
- Annual coupon payment
- face value × coupon rate
- Current bond price
- what the bond costs today (clean price)
Calculator
Result and step-by-step solution
Bought above par, so the current yield is below the 6% coupon rate.
- Annual coupon1,000.00 × 6% = 60.00
- Divide by the price60.001,050.00 = 5.7143%
How to use the formula
The annual coupon is the face value multiplied by the coupon rate, regardless of how often it is paid. If you buy above par, the current yield is below the coupon rate; below par, it is above. At par all three measures, coupon rate, current yield and yield to maturity, are equal.
A bond with a 1,000 face value and a 6% coupon pays 60 a year; at a price of 1,050 its current yield is 5.71%. That overstates the investor’s true return, because the 50 premium is lost at maturity; the yield to maturity accounts for it. Current yield is still useful for income planning and quick comparisons with the dividend yield of shares.
Frequently asked questions
- What is the current yield formula?
- Current yield = annual coupon payment ÷ current bond price × 100%.
- What is the difference between current yield and yield to maturity?
- Current yield only counts coupon income; YTM also includes the gain or loss between the price paid and the face value repaid at maturity.
- When is current yield equal to the coupon rate?
- When the bond trades at par (price = face value).
- Do I use the clean or dirty price?
- Normally the clean price, without accrued interest.
Last reviewed: September 26, 2026. Calculations run in your browser and were checked against numpy-financial, SciPy and published spreadsheet examples.