What yield is that price actually giving you?

The single annual rate that makes the present value of every remaining payment equal the price you are paying. It is the honest all-in return on holding a bond to maturity, because it counts both the coupons and the gain or loss between your price and the face value.

On the defaults here, a bond with a 9% coupon and five years left, bought at ₹960 against a ₹1,000 face value, has a yield to maturity of 10.04%. You get the 9% coupon on the face value plus ₹40 back at maturity that you never paid for.

Three numbers, routinely confused, and on the defaults here they are 9%, 9.38% and 10.04%.

Coupon rate is the interest the issuer pays on the face value. It has nothing to do with what you paid.

Current yield is the annual coupon divided by your price. Better, but it ignores the pull to par entirely, so it understates a discount bond and overstates a premium one.

Yield to maturity counts both the coupons and the capital movement. It is the only one of the three you can use to compare two bonds with different prices and maturities, and it is the one to ask for.

Almost always because market interest rates have risen since it was issued. A bond paying a 9% coupon is worth less once new bonds of similar quality pay 10%, and the price falls until the yields match. The second reason is credit: if the market has doubts about the issuer, the price falls to compensate whoever takes that risk. The first is arithmetic and the second is a judgement, and they look identical on a screen.

Interest builds up daily between coupon dates. If you buy halfway through a period, the seller has held the bond for that half and is entitled to that share, so you pay it to them and then receive the whole coupon on the next date. The quoted price is the clean price; what you actually settle is the dirty price, clean plus accrued. It is not a fee and it is not lost, but it does mean the cash leaving your account is more than the price you were quoted, which surprises most first-time buyers.

Coupon income is added to your income and taxed at your slab rate, with tax deducted at source at 10% above ₹10,000 of interest in a year. The TDS sits under Section 393 of the Income-tax Act 2025, which consolidated the old Sections 193 and 194A, and it is credited against your final bill rather than being an extra charge. Any gain between your purchase price and the redemption is a capital gain and is taxed separately.

No, and treating it that way is how people get hurt in fixed income. A yield is a price, and a high one is the market telling you something about the issuer. Two bonds at 9% and 14% are not the same product at different prices; the second one carries a materially greater chance of not paying you back. The useful discipline is to compare yields only within a rating band, and to treat any yield far above its peers as a question rather than an opportunity.

If you hold to maturity, nothing: you receive the coupons and the face value regardless of what rates do. If you sell before maturity, the price you get moves inversely with rates, and longer bonds move more. A five-year bond might move about 4% for a one percentage point change in rates; a fifteen-year bond considerably more. This is why the maturity you choose should match when you actually need the money.

Against a government security of similar maturity, and after tax. The gap between the two is what you are being paid for taking credit risk, and it is the only meaningful way to judge whether a corporate yield is generous or thin. Comparing a bond’s pre-tax yield with a fixed deposit’s pre-tax rate is not a comparison either, since both are taxed at slab but the timing differs. The post-tax yield calculator handles that.