Definition

The return you earn on a bond, expressed as a percentage, reflecting the interest income relative to its price.

What to consider

  • Look at the yield to understand your potential annual return.
  • Compare yields among bonds to find the best income opportunity.
  • Monitor yield trends to see how they fit with your investment plan.

Real world scenarios

  • Before investing, Jacob compared the bond yield of different issues to determine which one offered the best annual return relative to its price.

Related terms

Investments & Retirement