Bond Yield to Call (YTC)
Estimate the yield to call for a callable bond using the standard bond yield approximation formula. Assumes semi-annual coupon payments.
Results
What is it?
The Yield to Call (YTC) calculator estimates the annualized return on a callable bond assuming the issuer redeems it at the earliest call date. Callable bonds give the issuer the right to repay principal before maturity, usually at a slight premium. YTC is critical for bonds trading above par because the issuer is more likely to call the bond when interest rates fall.
How to use
Enter the bond's current market price, face value, annual coupon rate, years until the first call date, and any call premium (as a percentage of face value — enter 0 if redeemed at par). The calculator uses the standard yield approximation formula assuming semi-annual coupon payments.
Example scenario
You buy a bond at $1,050 with a $1,000 face value, 6% annual coupon (semi-annual payments), callable in 5 years at par (0% premium). The semi-annual coupon is $30 and there are 10 periods. YTC ≈ [30 + (1000 − 1050)/10] / [(1000 + 1050)/2] × 2 × 100 ≈ 4.88%.
Pro tip
Always compare YTC with yield to maturity (YTM). For premium bonds, the "yield to worst" — the lower of YTC and YTM — is the most conservative measure of return. If YTC is significantly lower than YTM, consider the likelihood of the bond being called before maturity.