Investment yield: calculate it and compare it

Yield is the income an investment pays relative to what you pay for it. It is the quickest way to compare income investments, if you compare the same kind of yield, after tax. IncomeGrid helps you discover higher-yield income opportunities you may not have looked at, so you can earn more on the same money. It has 40,000+ investment options screened, each with its yield, after-tax yield and a risk level from 1 to 5.

Yield and after-tax yield calculator

Price you pay ($)
Income per year ($)
Federal tax rate on this income (%)
State tax rate (%)
Free of federal tax? (1 = yes, e.g. most munis)
Free of state tax? (1 = yes, e.g. Treasuries)

Kinds of yield

Yield	Meaning	Used for
Current yield	Yearly income ÷ price today	Bonds, stocks, quick checks
Yield to maturity	Total yearly return if held to maturity, including price vs face value	Bonds, Treasuries
APY	Yearly return on a deposit including compounding	Savings, CDs
SEC yield	Standardized recent income of a fund, net of expenses	Bond and money-market funds
Distribution yield	Recent payouts ÷ price	Funds, REITs
Dividend yield	Dividends ÷ price	Stocks

Yield is not total return

Total return adds price changes to income. A bond fund yielding 5% can lose value if rates rise; a bond bought below face value adds a gain at maturity. See investment returns.

Compare on one basis

Stated yields mix tax-free and taxable income. Converting to after-tax yield (or to a tax-equivalent yield) puts them on one scale. IncomeGrid ranks every item by yield after tax for where you live: after federal, state and each investment type tax (Treasuries, municipal bonds, corporate bonds, funds, REITs and filed offerings are each taxed differently).

Yield and risk

Higher yield is the market's price for risk: a longer term, a weaker borrower, less liquidity. Comparing the yield of an option with a Treasury of similar maturity shows the extra yield – the spread – you are being paid. A spread that is unusually wide for the rating can be an opportunity or a warning; reading the issuer's documents tells you which. Within a risk level, the option with the higher after-tax yield is the one that lets you earn more for the same risk.

How IncomeGrid helps you earn more

IncomeGrid helps you discover higher-yield income opportunities you may not have looked at, so you can earn more on the same money. It has 40,000+ investment options screened, each with its yield, after-tax yield and a risk level from 1 to 5. Choose where you live and every yield is shown after federal, state and each investment type tax, so you can see which options pay you more.

Compare yields after tax → or browse example income portfolios

Frequently asked questions

How do you calculate yield on an investment?

Divide the yearly income by the price you pay. For bonds held to maturity, yield to maturity is more complete.

What is a good investment yield?

Compare with risk-free Treasury yields for a similar term; extra yield should pay for extra risk.

Is yield the same as interest rate?

Not exactly – see yield vs interest.

Not investment advice. General information only; yields change, check the source before acting.