On this page is a *bond yield to worst calculator*. Depending on the characteristics of a bond and its current market price, it computes the **yield to worst** – the worst yield you could see between any call features or maturity (but see the note below).

Yield to worst is the **lower** of yield to maturity or yield to call.

*Importantly, it assumes that all payments are made on time and the issuer doesn’t default.*

## Bond Yield to Worst Calculator

**Table of Contents**show ▼

#### Yield to Worst Calculator Inputs

**Current Bond Trading Price ($)**– Today’s trading price on the bond.**Bond Face Value/Par Value ($)**– The face value (“par value”) of the bond.**Years to Maturity**– The numbers of years until the bond matures.**Annual Coupon Rate (%)**– Annual percentage paid on the face value of the bond.**Coupon Payment Frequency**– How often the bond makes coupon payments.**Is the Bond Callable?**– “Is the bond in question callable?”. Essentially, does the bond have a prepayment or early redemption feature.**(If callable) Price to Call ($)**– Generally, callable bonds have some premium if they choose to exercise the option (more than the par value). Enter that here, or enter the bond face value if it doesn’t exist.**(If callable) Years to Call**– How long from the current date is the first opportunity for the bond to be called.

#### Bond YTW Calculator Outputs

**Yield to Worst (%)**– The lowest ongoing yield you’ll earn between either*yield to maturity*or*yield to call*.**Worst comes from**– Either*yield to maturity*or*yield to call*depending on which is a lower yield

## What is Bond Yield to Worst?

Bond yield to worst is a hybrid measure of *yield to maturity* or *yield to call*. YTW is the lowest of *yield to maturity* or *yield to call* **assuming the issuer doesn’t default.**

To compute yield to worst manually, calculate yield in both ways including yield to call assuming the bond is called when that option becomes available. Or, make it a bit easier on yourself and use our calculators:

**Note once again:** Even though ‘worst’ is in the phrase, YTW assumes all payments are on schedule and the issuer doesn’t default. (A default is – presumably – the *actual* worst case.)

## Why Use Yield to Worst?

*Yield to Worst* is an investor-focused measure: it answers what’s the lowest yield you might see on your bond investment. That is, again – assuming the issuer doesn’t default.

Assuming the issuer is perfectly rational and there are no other extenuating circumstances, you can make some behavioral assumptions based on the yields.

A rational issuer will either call a bond if it makes sense financially or otherwise let a bond mature normally. That model doesn’t *necessarily* hold up in the real world, but it’s a reasonable view when evaluating your investment options.

You should always calculate yield to worst on any bonds you consider for investment. If your bond *isn’t* callable (and the issuer doesn’t default!), you’ll pick up the yield to maturity for the entire time-frame. And if it **is** callable, you’ll want to calculate yield both ways and assume you’ll capture the **lower** of the two yields.

If you beat yield to worst while actually investing? Congrats…

…but please base your assumptions on the more pessimistic number.

## Financial Basics and Bond Valuation Calculators

Use the *Yield to Worst* in place of either Yield to Call or Yield to Maturity – even if it doesn’t play out, it’s best to **assume the worst**. Being overly conservative with your bond modeling means you can only be pleasantly surprised.

Always beware the overall risk of the bond, but keep *yield to worst* in mind when investing.

If you’re interested in the topic, Wikipedia also gives a decent overview of bond valuation.

### Yield to Worst on a Bond

For other calculators in our financial basics series, please see:

- Compound Interest Calculator
- Bond Pricing Calculator
- Compound Annual Growth Rate Calculator
- Bond Yield to Maturity Calculator
- Present Value Calculator
- Bond Yield to Call Calculator