Bond Calculator Online Free Tool
Bond Calculator
Bond Parameters
Bond Price
$0.00
Yield to Maturity
%
Current Yield
%
Payment Periods
0
Bond Summary
A bond is a fixed-income security where you lend money to an issuer (government, corporation) in exchange for regular interest payments and the return of principal at maturity. This calculator computes bond price, yield to maturity (YTM), current yield, and accrued interest so you can evaluate bonds accurately.
Bond Price and Yield
Bond price and yield move in opposite directions. When market interest rates rise, existing bonds with lower coupon rates become less attractive, so their prices fall. When rates fall, existing bonds paying higher coupons become more valuable, so prices rise. This inverse relationship is fundamental to fixed-income investing.
Bond Price = Σ [Coupon / (1+r)^t] + [Face Value / (1+r)^n] Where r = yield per period, n = total periods Current Yield = Annual Coupon Payment / Current Bond Price
If a bond pays $50/year, has face value of $1,000, and you pay $950, current yield = 50/950 = 5.26%.
Key Bond Metrics
Yield to maturity (YTM) is the total return if held to maturity, accounting for coupon payments and any gain/loss from buying at a discount/premium. Duration measures interest rate sensitivity: a bond with duration of 5 years loses about 5% in price for each 1% rise in interest rates.
| Metric | What It Shows |
|---|---|
| Coupon Rate | Annual interest as % of face value |
| Current Yield | Annual coupon / current market price |
| Yield to Maturity | Total annualized return if held to maturity |
| Duration | Price sensitivity to interest rate changes |
| Credit Rating | Default risk (AAA = safest, below BBB = junk) |
Frequently Asked Questions
What is the difference between coupon rate and yield to maturity?⌄
Coupon rate is fixed when the bond is issued and does not change. YTM reflects the current market price and changes daily. A bond with a 5% coupon bought at a discount to face value will have a YTM above 5% (you earn the coupon plus a capital gain). Bought at a premium, YTM will be below 5%.
Are bonds safer than stocks?⌄
Bonds are generally less volatile than stocks and have a legal claim on assets in bankruptcy that ranks ahead of equity. However, bonds carry interest rate risk (prices fall when rates rise), credit risk (issuer could default), and inflation risk (fixed payments lose purchasing power over time). Government bonds of stable countries have very low default risk.
What is a bond premium vs discount?⌄
A bond trading above its face value is at a premium (market rates are below the coupon rate). A bond trading below face value is at a discount (market rates are above the coupon rate). At maturity, bonds always pay back face value, so discount bonds provide a capital gain and premium bonds cause a capital loss at maturity.
What is duration and why does it matter?⌄
Duration measures how long it takes to recoup a bond's price through its cash flows, weighted by time. It also measures interest rate sensitivity: a 1% rise in rates reduces a bond's price by approximately its duration in percentage points. Long-duration bonds are more sensitive to rate changes than short-duration bonds.