Plain-English definitions, reviewed by an independent investor
Bond Yield
Bond yield is the return an investor gets from a bond, usually as a percentage of its price.
Bond yield is the return an investor gets from a bond, usually as a percentage of its price.
Yield ≈ Annual Coupon ÷ Bond Price × 100%
Why it matters
It lets you compare bonds of different prices and coupons on equal ground.
Common confusion
When bond prices rise, yields fall, and vice versa; the two always move opposite.
Frequently Asked Questions
Why do yields move opposite to price?
The coupon is fixed, so a lower price means the same coupon is a bigger percentage return.
What is yield to maturity?
The total return if you hold the bond to maturity, including price gain or loss.