What Is Bond Yield to Maturity?
By Financial World News editorial · Educational explainer · How we source yields
YTM is the annualised return if all coupons are paid, par is repaid, and coupons are reinvested at the YTM itself.
What Is Bond Yield to Maturity — the mechanics
That reinvestment assumption is the fine print. If rates fall, you may reinvest coupons at less than YTM. If you sell early, your realised yield is whatever the next buyer pays.
YTM is the constant annualised rate that makes the present value of remaining coupons and par equal the dirty price, assuming all coupons are paid and reinvested at that same rate — an assumption that is never literally true.
It is the right comparable across bonds. It is not your personal realised return if you spend coupons or sell early.
Name the compounding: semi-annual US/UK versus annual euro. A 4.00% semi-annual is not 4.00% annual.
Official sources (International guides)
Primary statistics and prospectuses for International guides are published by the issuer, not by this newsroom. The labelled links at the end of this page go to those official sites (DMO, TreasuryDirect, Finanzagentur, MEF, AFT, SNB or ECB as relevant).
Our live board is a teaching overlay: dated prints, named sources, estimated ISIN lines. It is not a replacement for the issuer’s calendar.
Key takeaways
- YTM is the constant annualised rate that makes the present value of remaining coupons and par equal the dirty price, assuming all coupons are paid and reinvested at that same rate — an assumption that is never literally true..
- Prices and yields change. When this site quotes them, it dates them on the live board.
- Credit of a G7 government in its own currency is not the same as a stable screen price, and not the same as a bank deposit.
FAQ
- Is YTM guaranteed?
- Only if the issuer pays, you hold to maturity, and you actually reinvest at that rate — the last part is rarely true to the decimal.