YTM Calculator

What is YTM?

YTM (Yield to Maturity) is the annualised return of a bond if:

• you buy the bond at the current market price,
• hold it till maturity, and
• receive all coupon payments as scheduled.

YTM combines:

• coupon income (interest you receive), and
• capital gain/loss (difference between purchase price and maturity value).

YTM is often used to compare bonds with different coupons, prices, and maturities on a like-for-like basis.

When is YTM useful?

Use YTM when you want to:

• compare two bonds with different coupon rates,
• check whether a bond is trading at a discount (price < face value) or premium (price > face value),
• estimate expected return if you plan to hold till maturity (not for trading).

YTM Calculator

Inputs

• Face Value (Par Value)
  The amount payable by the issuer at maturity (commonly ₹1,000 / ₹10,000 / ₹1,00,000).
• Current Market Price
  The price at which you are buying the bond today.
• Coupon Rate (% p.a.)
  Annual interest rate on face value.
• Coupon Frequency
  Annual / Semi-annual / Quarterly (as per the bond).
• Years to Maturity (or Maturity Date)
  Remaining time until the bond matures.

Output

• Yield to Maturity (YTM % p.a.)
  The estimated annualised yield based on the inputs.

How is YTM calculated?

YTM is the discount rate that equates:

• the bond’s current market price, with
• the present value of all future coupon payments + face value at maturity.

Because YTM is solved from a present-value equation, it is typically computed using an iterative method (trial-and-error / numerical solving).

Quick interpretation

• If Market Price < Face Value → YTM is usually higher than Coupon Rate (bond at discount)
• If Market Price > Face Value → YTM is usually lower than Coupon Rate (bond at premium)
• If Market Price ≈ Face Value → YTM is usually close to Coupon Rate

Example (simple)

Assume:

• Face Value: ₹1,000
• Price: ₹950
• Coupon: 8% p.a. (₹80/year)
• Maturity: 3 years

Since you’re buying below face value (discount), your return includes:

• coupon income +
• an additional gain because ₹950 becomes ₹1,000 at maturity → YTM will generally be > 8%.

Important notes & assumptions

This calculator provides an estimated YTM based on standard bond mathematics. Actual outcomes may differ due to:

• changes in market price before maturity,
• taxes, brokerage, and platform charges,
• reinvestment rates for coupons being different from YTM,
• credit risk / default risk / delays in payments,
• call/put options or special features (if applicable).