## yield-to-maturity

Noun

(*plural* yields to maturity)

- (finance) The internal rate of return on a bond held to maturity, assuming scheduled payment of principal and interest.
- (law) A calculation of yield on a bond that takes into account the capital gain or loss on a discount bond or capital loss on a premium bond. In the case of a discount bond, the yield-to-maturity, YTM, is higher than the current yield, or the coupon yield. The reverse is true for a premium bond with YTM lower than both current yield and coupon yield.

## yield-to-maturity - Investment & Finance Definition

The effective interest rate that a bondholder will earn if the bond is held until maturity. Yield-to-maturity takes into account the bondâ€™s purchase price, its current market price, the coupon rate, which is the interest rate that the bond pays, and the amount of time remaining until the bond matures. Yield-to-maturity is the most accurate representation of how much a bond will actually receive if the bond is held until maturity.