What is bond equivalent yield?

BEY is the annualized yield of a discount-basis instrument (like a T-bill or zero-coupon bond) restated on a 365-day, semi-annual-equivalent basis so it can be compared directly with coupon bonds. The formula is: BEY = (Face − Price) / Price × (365 / Days).

How does BEY differ from discount yield?

Discount yield uses face value as the base and a 360-day year: DY = (Face − Price) / Face × (360 / Days). BEY uses purchase price as the base and a 365-day year, so it is always higher than the corresponding discount yield.

When should I use BEY vs effective annual yield?

Use BEY when comparing with bonds that quote on a semi-annual, 365-day basis (most U.S. Treasuries and corporate bonds). Use effective annual yield (EAY) when you need the true compounded annual return.

Does this assume no coupon payments?

Yes. BEY as calculated here applies to pure discount instruments (T-bills, zero-coupon bonds, commercial paper) that pay no intermediate coupons. For coupon bonds, BEY is derived differently from the YTM.

What day count does this tool use?

The BEY formula uses actual days entered divided by 365. The discount yield mode assumes a 360-day year for the input rate, then converts. This matches the standard U.S. Treasury bill convention.

Bond Equivalent Yield Calculator

Name: Bond Equivalent Yield Calculator
Availability: InStock
Author: Nham Vu

Convert a discount yield or T-bill price to bond equivalent yield (BEY) on a 365-day basis.

Inputs

Discount Rate (%)

Days to Maturity

Face Value ($)

Results

Enter values and click Calculate.

Summary

Convert a discount yield or T-bill price to bond equivalent yield (BEY) on a 365-day basis.

How it works

Choose input mode: discount yield (e.g., T-bill) or price/face-value (zero-coupon bond).
For discount mode, enter the stated discount rate and days to maturity.
For price mode, enter face value, purchase price, and days to maturity.
The calculator derives the holding-period return from your inputs.
It then annualizes that return using the 365-day BEY formula.
Results show BEY alongside the equivalent money-market yield for cross-referencing.

Use cases

Compare T-bill yields against corporate bond yields on equal footing.
Evaluate commercial paper returns alongside coupon bond alternatives.
Convert a zero-coupon bond price into an annualized yield for a portfolio report.
Quickly check if a money-market instrument beats a short-duration bond.
Classroom or CFA exam practice on yield-basis conversions.
Validate bond pricing models that require BEY inputs.

Frequently Asked Questions

Last updated: 2026-07-01 · Reviewed by Nham Vu

Purchase Price	—
Face Value	—
Discount ($)	—
Days to Maturity	—
Holding-Period Return	—
Discount Yield (360-day)	—
Effective Annual Yield	—