Coupon Calculator 2026

It calculates how much interest income a bond pays each year (and per payment), plus the current yield if you enter the price you'd pay for it. Enter the bond's face value, coupon rate, and payment frequency, and it computes your annual coupon income and per-payment amount. Add the bond's current market price to also see the current yield — your actual return based on what you'd pay today, not the bond's face value.

Coupon rate is fixed and based on face value; yield reflects your actual return based on the price you paid. If you buy a $1,000 face-value, 5% coupon bond for $950, you still receive $50 a year, but your current yield is 5.26% ($50 ÷ $950) because you paid less than face value. Buy it at $1,050 and your yield drops to 4.76%. The coupon rate never changes after issuance; your yield depends entirely on your purchase price.

Bonds trade below face value (at a discount) when their fixed coupon rate is less attractive than current market interest rates — the price falls until the yield matches what the market demands, and buying at a discount raises your current yield above the stated coupon rate. Bonds trade above face value (at a premium) when their coupon rate is higher than current market rates, which lowers your current yield below the coupon rate and means you'll receive less than you paid at maturity.

No. Current yield only looks at annual coupon income relative to today's price. Yield to maturity also factors in any gain or loss you'll realize by holding the bond to maturity (buying at a discount or premium to face value) and the time value of that gain or loss. A bond bought at a steep discount can have a current yield that understates its true YTM. This calculator computes current yield only, not YTM.

This calculator only computes the income a bond promises to pay — it doesn't assess the risk the issuer might miss a payment or default. Higher coupon rates often compensate for higher credit risk (a company or government with weaker credit typically has to offer a higher coupon to attract buyers). Check the bond's credit rating from agencies like Moody's, S&P, or Fitch before assuming a high coupon is simply 'free' extra income — it's usually pricing in extra risk.