Investing term

What is YTM (Yield to Maturity)?

The total annualised return a bondholder earns if they buy the bond today and hold it to maturity.

Yield to maturity (YTM) is the total annualized return you'd earn by buying a bond today and holding it to maturity, capturing both its coupon payments and any difference between its price and face value. It's the most complete single measure of a bond's return, letting you compare bonds with different prices, coupons, and maturities on equal footing.

For example

A bond bought below face value has a YTM higher than its coupon, because you collect interest plus the gain as it climbs to face value at maturity.

YTM (Yield to Maturity) is taught hands-on in Stage 19 — Beyond Stocks.

See the lesson →

Related terms

ASMLDutch semiconductor-equipment company that makes the EUV lithography machines every advanced chip is manufactured on — a global monopoly with no US peer.Bond ladderA portfolio of bonds with staggered maturities — one matures every year (or every few years) so cash continuously becomes available.CryptocurrencyDigital assets recorded on a blockchain — Bitcoin, Ethereum, etc. Highly volatile and not backed by cash flows or governments.Currency hedgingAn overlay used by some international ETFs to remove the effect of currency moves, so you get the foreign stock return in your home currency.
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