Yield to Maturity

Knowledge Center

Summary, forum, best practices, expert tips and information sources.

8 items • 26.782 visits


What is Yield to Maturity? Meaning.

Yield to Maturity (YTM) is the annual rate of return anticipated on a bond that a bondholder buying a bond today and holding it to maturity would receive on his investment. YTM takes into account the total of annual interests payments (coupon yield) , the purchase price, the Redemption Value, the amount of time (number of years) remaining until maturity, and the time between interest payments. Recognizing the Time Value of Money, the technique is used to determine the rate of return an investor will receive if a long term, interest-bearing  investment is held to its Maturity Date. An approximate YTM can be found by using a bond yield table.

YTM is equal to the discount rate at which the Present Value of all future payments would equal the present price of the bond, also known as the Internal Rate of Return.


Using Bond Insurance, investors can protect themselves against economical loss in the event of payment default of the issuer, in return for paying a specified premium to a third party, usually an insurance company. The premium will provide interest and capital repayments as specified in the bond policy.

Note that it is assumed in the YTM rate, that the coupons are reinvested at the YTM rate. This may or may not be accurate, if the bonds are sold at prices above, or below, their Face Value or Par Value.

Also called Maturity Yield and Effective Rate of Return.

Special Interest Group


Yield to Maturity Special Interest Group.

Special Interest Group (21 members)


New Topic

Forum about Yield to Maturity.

🔥 NEW Yield to Maturity Assuming Coupons Reinvested
I'm confused by the last segment of the explanation where it says the YTM rate assumes that coupons are reinvested at th (...)

Start a new forum topic about Yield to Maturity. More info.


Best Practices

The top-rated topics about Yield to Maturity. Here you will find the most valuable ideas and practical suggestions.

Expert Tips

Advanced insights about Yield to Maturity. Here you will find professional advices by experts.

Information Sources

Various sources of information regarding Yield to Maturity. Here you will find powerpoints, videos, news, etc. to use in your own lectures and workshops.

Research Links

Automatically jump to further useful sources regarding Yield to Maturity.

News Videos Presentations Books More






Compare with: Maturity Date  |  Redemption Value  |  Face Value  |  Net Present Value

Special Interest Group

Do you have a keen interest in Yield to Maturity? Become our SIG Leader


Return to Management Hub: Decision-making & Valuation  |  Finance & Investing

More on Management  |  Return to Management Dictionary


This ends our Yield to Maturity summary and forum.

About 12manage | Advertising | Link to us / Cite us | Privacy | Suggestions | Terms of Service
2021 12manage - The Executive Fast Track. V15.8 - Last updated: 21-10-2021. All names of their owners.