Investing Basics

What Is Yield to Maturity (YTM)?

Yield to maturity (YTM) is the total annual return an investor can expect from a bond if it is held until it matures and all payments are made as scheduled. It accounts for the bond’s price, its coupon payments, and the gain or loss between the purchase price and the face value repaid at maturity.

YTM vs. Coupon Rate

The coupon rate is fixed interest based on face value. When a bond is bought below face value, its YTM is higher than its coupon rate; above face value, lower.

Prices and Yields

Bond prices and yields move in opposite directions.

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🔗 Related Terms

Bond Treasury Bond Municipal Bond Interest Rate

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Last updated: September 29, 2026. This definition is for general educational purposes only. It is not financial, investment, tax, legal, or medical advice, and it does not recommend any product or course of action. For decisions about your own situation, consult a qualified professional.