Bond Calculator
Calculate bond yield, current yield, and total return from coupon rate and market price
Face Value (₹)
₹
Annual Coupon Rate (%)
%
Years to Maturity
yr
Market Price (₹) (leave blank if buying at par)
₹
Coupon Frequency
Bond Analysis
Yield to Maturity (YTM)
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Current Yield
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Annual Coupon
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Periodic Coupon
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Total Coupon Income
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Capital Gain/Loss
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Total Return
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Bond Yield Explained
A bond's Yield to Maturity (YTM) is the total return expected if held until maturity, accounting for coupon payments plus capital gain or loss. When market price < face value, the bond trades at a discount and YTM > coupon rate. When price > face value (premium), YTM < coupon rate.
Current yield is simpler: annual coupon ÷ market price. Government of India bonds (G-Secs) typically yield 7–8%; corporate bonds yield higher due to credit risk. The YTM here uses the Hawawini–Vora approximation formula, accurate to within ±0.1% for most bonds.
lightbulb Example
₹1,000 bond, 8% coupon, 10yr, price ₹950:
1Annual coupon: ₹80
2YTM ≈ (80 + 50/10) / ((1000+950)/2)
✓ YTM ≈ 8.72% (discount bond)
quizFrequently Asked Questions
What happens to bond price when interest rates rise?
When interest rates rise, existing bond prices fall — they move inversely. A bond paying 7% becomes less attractive when new bonds pay 9%, so its market price drops below face value (it trades at a discount). Longer-duration bonds are more sensitive to rate changes than short-duration bonds.
What is YTM and how is it different from coupon rate?
Coupon rate is the fixed annual interest rate printed on the bond (e.g., 7% of face value). Yield to Maturity (YTM) is the total annualised return if you buy the bond at its current market price and hold it to maturity. If you buy at a discount, YTM > coupon rate; if you buy at a premium, YTM < coupon rate.
Are Indian government bonds (G-Secs) safe to invest in?
Government Securities carry zero credit risk since they're backed by the Government of India. They do carry interest rate risk (price falls if rates rise). For retail investors, RBI Retail Direct allows direct G-Sec purchases with no intermediary. Returns are fully taxable as per your income tax slab.