yield investment & finance definition

The return that is earned on an investment. For example, a bond that pays 7 percent interest yields 7 percent, which also may be called the nominal yield. Current yield, however, gives the actual interest rate that will be earned. To obtain current yield, divide the amount of interest earned annually, using the bond’s interest rate, by the purchase price. In contrast, the yield to maturity is the effective interest rate that is earned if the bond is held until it matures.