What is yield to call (YTC)?

YTC is the annualized rate of return an investor earns if the bond is purchased at the current market price, all coupons are received on schedule, and the issuer calls the bond at the call price on the call date. It is the discount rate that makes the present value of all coupon payments plus the call price equal to the current bond price.

Why is YTC lower than YTM for premium bonds?

When a bond trades above its call price, an early call cuts short the period over which coupons are earned and forces redemption at a price below what was paid. Both effects reduce the annualized return, making YTC lower than YTM. Issuers typically call bonds when interest rates drop, which is exactly when premium bonds are most exposed to call risk.

What is the "yield to worst"?

Yield to worst (YTW) is the lowest of all possible yields — YTC for each call date, yield to put (if applicable), and YTM. Conservative investors use YTW as their planning rate because it represents the minimum they can expect to earn.

How is the call price entered?

Enter the call price as a percentage of face value. A call price of 102 means the bond will be redeemed at 102% of par, or $1,020 on a $1,000 bond. A call price of 100 means par redemption. The calculator converts this to a dollar amount automatically.

What coupon frequency should I choose?

Most US corporate and government bonds pay semi-annually. Municipal bonds often pay semi-annually as well. Annual is common for Eurobonds. Quarterly is less common but used by some preferred securities. Match the frequency to your actual bond indenture.

How accurate is the bisection method used here?

The calculator iterates until the error is below 0.000001% (0.00000001 in decimal). This precision matches or exceeds HP 12C and BA II Plus financial calculators and Excel YIELD function results to at least 4 decimal places.

Yield to Call Calculator

Enter bond details and call terms to instantly calculate yield to call, compare it with yield to maturity, and see a full cash flow breakdown.

Bond Details

Face Value (Par) $

Annual Coupon Rate (%)

Current Market Price $

Call Price (% of par, e.g. 102)

Years to Call

Years to Maturity

Coupon Frequency

Fill in the bond details and click Calculate to see YTC results.

Yield to Call

—

Annualized

Yield to Maturity

—

Annualized

Current Yield

—

Annual / Price

YTC vs. YTM Comparison

Metric	To Call	To Maturity

Cash Flow Schedule (to Call Date)

Period	Coupon ($)	Principal ($)	Total CF ($)	PV ($)

Summary

The Yield to Call Calculator computes the annualized return an investor earns if a callable bond is held until its first call date and the issuer exercises the call option. Because no closed-form solution exists for YTC, the tool uses a bisection algorithm that narrows the answer to within 0.000001% tolerance. Results include YTC, yield to maturity (YTM), current yield, total coupon income, and a side-by-side comparison table so you can see which yield scenario is more favorable.

How it works

Enter the bond face value (par), typically $1,000.
Enter the annual coupon rate as a percentage (e.g., 6 for 6%).
Enter the current market price of the bond.
Enter the call price as a percentage of par (for example, 102 means 102% of face value).
Set the years to call (time remaining until the first call date).
Set the years to maturity and select coupon frequency (annual, semi-annual, or quarterly).
Click "Calculate" to run bisection iteration and view YTC, YTM, current yield, and the comparison table.

Use cases

Evaluating whether to buy a callable bond when rates are likely to fall.
Comparing callable and non-callable bonds with the same issuer.
Stress-testing a bond portfolio for early redemption scenarios.
Verifying broker-quoted YTC figures with an independent calculation.
Teaching fixed-income concepts: YTC vs. YTM vs. current yield.
Deciding whether to hold a premium bond to call or sell before the call date.

Frequently Asked Questions

Last updated: 2026-05-23 · Reviewed by Nham Vu