Moneyzine
/Investment Guides /Taxable Equivalent Yield Calculator

Taxable Equivalent Yield Calculator

Moneyzine Editor
Author: 
Moneyzine Editor
3 mins
October 4th, 2023
Advertiser Disclosure

This taxable-equivalent yield calculator is able to determine the federally tax exempt equivalent, as well as the tax-free yield, of a bond that is not subject to federal or state income taxes. The calculator only requires five inputs: the current bond price, the bond's par value, the coupon rate on the bond, as well as your state and federal income tax brackets.

Calculator Definitions

The variables used in our online calculator are defined in detail below, including how to interpret the results.

Current Bond Price ($)

This is the current selling price, or the market price of the bond. This is the price you'd have to pay to acquire this particular bond.

Bond Par Value ($)

This is the bond's par value. The par value of a bond is also known as the bond's face value or redemption value. This is the value the investor would receive for the bond on its maturity date.

Bond Coupon Rate (%)

The bond coupon rate is the rate of interest paid by the bond, based on the bond's par value. For example, a bond with a par value of $1,000, and a coupon rate of 5.000%, would pay the bearer of the bond $50 per year.

Federal Income Tax Bracket (%)

This is your marginal federal income tax bracket. If you're unsure of this value, we have several tax rate calculators that can help determine the correct input. Former tax brackets include 10%, 15%, 25%, 28%, 33%, and 35%; those starting in 2018 include 10%, 12%, 22%, 24%. 32%, 35% and 37%.

State Income Tax Bracket (%)

This is your marginal state income tax bracket. If you're unsure of this value, you can look at our article on state income tax rates.

Fully -Taxable Bond Yield (%)

The fully-taxable bond yield is the effective rate of interest paid to the bond holder, based on the price paid for the bond, and the interest payments made on the bond.

Federally Tax Exempt Equivalent (%)

This is the equivalent bond yield for a government or municipal bond that is free from federal income taxes.

Federal and State Tax Exempt Equivalent (%)

This is the equivalent bond yield for a government or municipal bond that is free from both federal as well as state income taxes.


Taxable-Equivalent Yield Calculator


Disclaimer: These online calculators are made available and meant to be used as a screening tool for the investor. The accuracy of these calculations is not guaranteed nor is its applicability to your individual circumstances. You should always obtain personal advice from qualified professionals.

Related Content

How to Make a Million Dollars in 10 Years
Truthfully, this title should actually be “How to Make a Million Dollars in 10 Years Without Going Into Debt", but that is just getting a little too winded for my liking. It’s true though!
March 26th, 2024
How to Apply Maslow’s Hierarchy to Your Money This Year
You might vaguely remember your psychology teacher talking about Maslow. He pointed at a picture of a triangle as you nodded off in the back of the school room.
March 27th, 2024
How to Tackle Multiple Savings Goals
When there’s only so much money to go around, there are often multiple savings goals competing for your money. Think of the young professional who’d like to get a more reliable car, buy a house, and save for retirement. Or consider the young family that’s saving for college, retirement, and a bigger house.
March 22nd, 2024
The Countdown to Early Retirement: 10 Expenses to Eliminate
Dreaming of waving goodbye to the daily grind five years ahead of schedule? The road to early retirement is paved with more than good intentions; it requires a meticulously crafted strategy with surprising twists. It's not solely about what you should be doing—like diligently saving a portion of your income or investing wisely—but also about what you need to stop doing.
March 22nd, 2024
Biden Or Trump: Who Is Better For The Economy And Stocks?
Yup. This is one of those articles. It's an election year, and here in the U.S., we get to decide which old dude who’s been alive long enough to remember when there were only 48 states in the U.S. will be the leader of the free world.
March 19th, 2024

Contributors

Moneyzine 2024. All Rights Reserved.