Calculate bond price, yield to maturity (YTM), current yield and total return — enter face value, coupon rate, market price and maturity to fully analyse any bond.
Enter your figures and click Calculate to see your results.
Enter the bond face value, coupon rate, current market price and years to maturity to calculate YTM, current yield and total return.
Press the Calculate button. Results appear instantly — all calculations run locally in your browser.
See your full investment projection including principal, interest earned, total value and growth chart. Use Copy or Download to save your results.
A bond is a fixed-income security where you lend money to a government or corporation for a set period at a predetermined interest rate (the coupon rate). In return, you receive regular coupon payments and get your principal back at maturity. Bonds are generally less risky than stocks but offer lower long-term returns.
Yield to Maturity (YTM) is the total return you can expect if you hold the bond until it matures, assuming all coupon payments are reinvested at the same rate. It accounts for the difference between the purchase price and the face value. YTM is the most comprehensive measure of a bond's return and the standard for comparing bonds.
Bond prices and interest rates move inversely. When new bonds are issued at higher rates, existing bonds with lower coupon rates become less attractive — their price falls until the yield matches the new market rate. Conversely, when rates fall, existing bonds with higher coupons become more valuable and their price rises.
The coupon rate is the fixed annual interest payment as a percentage of the face value (set when the bond is issued). The current yield is the annual coupon payment divided by the current market price. If a £1,000 bond with a 5% coupon is trading at £900, the current yield is 5.56% (£50 / £900). Current yield reflects the actual return at today's price.
Gilts are UK government bonds issued by HM Treasury. They are considered among the safest investments as they are backed by the government's full faith and credit. Gilts pay a fixed coupon twice yearly and return the face value at maturity. The yield on 10-year gilts is a key benchmark for UK interest rates and mortgage pricing.
Bond ratings (AAA to D) from agencies like Moody's, S&P and Fitch indicate the creditworthiness of the bond issuer. AAA is the highest quality (lowest default risk); bonds below BBB- (investment grade threshold) are called high-yield or junk bonds. Higher ratings mean lower yields; lower-rated bonds must offer higher yields to attract investors given their higher default risk.
Duration measures a bond's sensitivity to interest rate changes. A bond with duration of 7 years will lose approximately 7% of its value if interest rates rise by 1%. Longer-duration bonds are more sensitive to rate changes. This is why long-term bonds are riskier than short-term ones in a rising rate environment, even though both may have the same coupon rate.
Bond attractiveness depends on the interest rate environment, your time horizon and risk tolerance. In a rising rate environment, bond prices fall — so existing bonds lose value short-term. However, higher rates mean new bonds offer better yields. For retirees and conservative investors, bonds provide stable income and reduce portfolio volatility. A diversified portfolio typically holds both stocks and bonds.
