Bond yield is the rate of return that accrues on a bond, which is determined by interest payments and any increase in the bond price (the difference between the purchase price and the face value of the bond) during the holding period.

The yield, also known as yield to maturity, is a measure of bond lucrativeness. Other types of yields include: yield to call, coupon yield and current yield. The yield to call is the cumulative return over the period ending with the bond being called by the issuer. The coupon yield is the annual interest rate that is defined when the bond is issued. And the current yield is the ratio of the coupon payment to the bond’s current price.