PIB & Bond Yield Calculator

A fixed-rate bond is a stream of known cash flows: a coupon every period and the face value at the end. Its price is what those cash flows are worth today when discounted at the market yield. A higher yield discounts them more, so the price falls. A PIB pays coupons twice a year, so the calculator discounts at half the yearly yield over twice as many periods.

Going the other way, the calculator searches for the yield that reproduces the price you enter. Current yield is the coupon divided by the price. Macaulay duration is the average time to receive the cash flows, weighted by their present value, and modified duration divides it by (1 + i) to give the approximate percentage price change for a one point move in yield. The calculator also reprices the bond exactly at yields one point higher and lower.

Take a 5-year PIB with a 12.5% coupon, valued at the latest 5-year cut-off yield of 12.8998% (auction of October 7, 2026). The price is Rs 98.5596 per Rs 100, so Rs 1,000,000 of face value costs Rs 985,596. It pays Rs 62,500 every six months before tax, and Rs 53,125 after 15% withholding tax for a filer. Held to maturity the net profit is Rs 545,654: net coupons plus the Rs 14,404 gained as the price pulls up to face value.

Modified duration is 3.62, so if the yield rose one percentage point the price would fall by about Rs 3.49 per Rs 100, and if it fell one point it would rise by about Rs 3.65. As a check, a 10% coupon, 5-year bond at an 8% yield is worth Rs 108.1109.

The table shows the four fixed-rate PIB tenors at the latest cut-offs, for a bond bought at face value with a coupon equal to the cut-off. The longer the bond, the more its price reacts to yield changes.

A fixed-rate PIB keeps the same coupon for its whole life, which is what this calculator prices. Its price moves as market yields move, and you know every coupon in advance.

A floating-rate PIB resets its coupon at set intervals against a benchmark tied to treasury bill yields. The coupon you will receive next year is not known today, so the cash flows cannot be listed and a precise yield cannot be computed in advance. Its price stays close to face value because the coupon follows rates up and down. If you want a rough read on a floating bond, enter its current coupon and yield here, and treat the later coupons as estimates that will change at each reset.

The same maths prices a sukuk or a term finance certificate (TFC) that pays a fixed profit rate. Pick the bond type so the right withholding tax is used. For individuals in tax year 2027:

Corporate bonds and sukuk carry credit risk that government paper does not, and listed ones can trade thinly, so the price you can sell at may differ from the price the maths gives. Compare your after-tax yield with T-bills, National Savings and bank deposits. To see where the coupons fall in your return, use the income tax calculator.

• Price below 100 is a discount: the yield is above the coupon. Above 100 is a premium: the yield is below the coupon. A 10-year par bond with a 12.5% coupon prices at 100.00 and has a Macaulay duration of 5.97 years.
• Yield to maturity assumes you reinvest coupons at the same yield. If rates fall, you reinvest at less and your realised return is lower.
• Hold to maturity and the price swings do not matter, apart from the opportunity cost. Sell early and you receive the market price of that day.
• Check real returns. Compare the after-tax yield with price rises using the inflation calculator.