NCD Yield / Effective Return Calculator

Calculate a Non-Convertible Debenture's current yield and approximate yield to maturity (YTM) from its coupon rate, face value and your purchase price. Pick a live NCD to auto-fill face value and coupon.

Current Yield

+9.00%

Current yield = annual interest ÷ your purchase price. Differs from the coupon rate whenever you buy above or below face value.

Annual Interest

₹90

Approx. Yield to Maturity

+9.00%

Coupon Rate

+9.00%

Approx. YTM uses the standard simplified formula — [annual interest + (face value − purchase price) ÷ years to maturity] ÷ [(face value + purchase price) ÷ 2] — a widely used estimate, not a precise IRR calculation. NCD interest is taxable at your income slab rate; consult a tax advisor for TDS and filing treatment.

How the NCD Yield / Effective Return Calculator works

An NCD's coupon rate is fixed at issue and paid on face value regardless of what you actually pay for it. If you buy at face value (typical at issue), your current yield equals the coupon rate. If you buy in the secondary market at a discount or premium to face value, current yield and coupon rate diverge — current yield rises when you buy below face value, and falls when you buy above it.

Approximate Yield to Maturity (YTM) additionally accounts for the capital gain or loss you'll realise at maturity if your purchase price differs from face value, spread over the remaining tenure. This calculator uses the standard simplified approximation formula — a widely used estimate, not a precise internal-rate-of-return calculation, which would need to account for the exact timing of each interest payment.

Disclaimer: This calculator is for educational purposes only and does not constitute investment advice. Always read the Red Herring Prospectus and verify current rates before applying for any IPO.

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Frequently Asked Questions

What's the difference between coupon rate and yield?

Coupon rate is the fixed interest rate paid on the NCD's face value, set at issue. Yield reflects your actual return based on what you paid — if you buy below face value, your yield is higher than the coupon rate, and vice versa.

Is NCD interest income taxable?

Yes — NCD interest is taxable at your applicable income tax slab rate, not at a flat capital-gains rate. TDS may also apply depending on the NCD's terms and your investor category. Consult a tax advisor for your specific filing treatment.

Are NCD returns guaranteed?

No — NCDs are debt instruments carrying the issuer's credit risk. Interest and principal repayment depend on the issuing company's ability to pay; the credit rating (AAA, AA, etc.) is a proxy for this risk, not a guarantee.

What happens if I sell an NCD before maturity?

You can sell a listed NCD on the exchange before maturity at the prevailing market price, which may be above or below what you paid — any gain or loss is typically treated as a capital gain/loss for tax purposes, separate from the interest income already received.