A graph that plots the relationship between yield to maturity (YTM) and maturity for a set of similar bonds (or any other type of fixed-income securities). This curve usually has a positive slope because yields on long-term bonds are generally higher than yields on short-term bonds. The shape of this curve depends on a number of factors including investors’ expectations as to the level of future interest rates and the riskiness of long-term bonds relative to short-term bonds.

The yield curve is also called a term structure of interest rates.