Bonds & rates
Current yield
A bond’s annual coupon divided by its current market price.
How it works
It measures the income return at today’s price and ignores any gain or loss from the price converging to face value at maturity.
It is a quick figure and an incomplete one, which is why yield to maturity is the standard.
Formula
Current yield = annual coupon ÷ market price × 100Related terms
- CouponThe fixed interest a bond pays each year, expressed as a percentage of its face value.
- Yield to maturityThe total annual return from holding a bond to maturity, counting coupons and any price gain or loss.
- Face valueThe amount a bond repays at maturity, and the amount its coupon is calculated on.
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Educational reference only. Nothing here is investment advice or a recommendation to buy or sell anything, and tax treatment depends on your own circumstances and the country you are in.