Current yield is a bond's yearly coupon divided by its market price. A 9% bond bought at ₹1,050 per ₹1,000 of face value has a current yield of 90 ÷ 1,050 = 8.57%.
Current yield shows the income you get for the price you pay, but it ignores the gain or loss at maturity. For a bond bought above face value, the current yield overstates the true return; yield to maturity is the better measure.
Related
Related terms: Yield to maturity (YTM) · Coupon rate · Clean price and dirty price
Before investing, look up the issuer: all its outstanding bonds, rating history and disclosure documents.
This page is for information only. It is not investment advice, a credit rating or a recommendation to buy, sell or hold any security. Facts are taken from the issuer's own documents and the sources linked on this page; check them with the source before investing.
