Yield to Worst Calculator
Yield to worst is the most conservative return on a callable bond: it is the lower of the yield to maturity and the yield to call, reflecting that an issuer will call a bond when it benefits them, often reducing the investor's return. This calculator solves both yields numerically from the bond's price and cash flows, then reports the worst case. Enter face value, coupon rate, current price, years to maturity, years to call, the call price, and payments per year. Yields are solved by bisection and annualised by the payment frequency.
Yield to worst method
Per period: y solves price = sum(C / (1+y)^t) + redemption / (1+y)^n
C = face * coupon / freq, n = years * freq
YTM uses redemption = face at maturity
YTC uses redemption = call price at the call date
YTW = min(annualised YTM, annualised YTC)
The periodic yield is found by bisection, then multiplied by the payment frequency to give a nominal annual yield. Yield to worst is the lower of the two.
Yield to worst context
- Callable bonds are usually called when rates fall, capping investor upside.
- Yield to worst is the prudent yield to quote for a callable bond.
- For premium bonds, yield to call is often the worst case.
- For discount bonds, yield to maturity is often the worst case.
- Multiple call dates can be assessed; the lowest yield across all is the worst.
Yield to worst: frequently asked questions
What is yield to worst?
Yield to worst (YTW) is the lowest yield an investor can receive on a callable bond, assuming the issuer acts in its own interest. It is the minimum of the yield to maturity and the yield to each possible call date. For a simple callable bond, it is the lower of yield to maturity and yield to call.
Why does yield to worst matter?
If a bond can be called early, the issuer will usually call it when doing so benefits them, which can cut the investor's return. Yield to worst gives the most conservative return estimate, so investors do not overstate the yield they will actually earn.
How is the yield solved?
Each yield is the discount rate that sets the present value of the bond's cash flows equal to its current price. Because this cannot be solved with simple algebra, the calculator uses numerical bisection to find the periodic yield, then annualises it by the payment frequency.
What is the difference between yield to maturity and yield to call?
Yield to maturity assumes the bond is held to its maturity date and repays the face value. Yield to call assumes the bond is called on the call date and repays the call price, usually at or near face value. Yield to worst takes the lower of the two.
What inputs are needed?
Enter the face value, annual coupon rate, current market price, years to maturity, years to the call date, the call price, and the number of coupon payments per year. The calculator returns yield to maturity, yield to call, and yield to worst.
Official sources
- U.S. Securities and Exchange Commission: Investor.gov.
- U.S. Securities and Exchange Commission: SEC.gov.
Reviewed by the CalculatorHub team, edited by James Graham, 17 June 2026. See our methodology.