{"id":12180,"date":"2026-05-22T13:38:20","date_gmt":"2026-05-22T13:38:20","guid":{"rendered":"https:\/\/lemonn.co.in\/blog\/glossary\/bond-yield\/"},"modified":"2026-05-22T13:38:20","modified_gmt":"2026-05-22T13:38:20","slug":"bond-yield","status":"publish","type":"glossary","link":"https:\/\/lemonn.co.in\/blog\/glossary\/bond-yield\/","title":{"rendered":"Bond Yield"},"content":{"rendered":"<p><a class=\"glossaryLink\" href=\"https:\/\/lemonn.co.in\/blog\/glossary\/bond-yield\/\" data-gt-translate-attributes='[{\"attribute\":\"data-cmtooltip\", \"format\":\"html\"}]' tabindex=\"0\" role=\"link\">Bond yield<\/a> is the return an investor earns from holding a bond, expressed as a percentage. It moves inversely to bond prices &#x2014; when prices rise, <a class=\"glossaryLink\" href=\"https:\/\/lemonn.co.in\/blog\/glossary\/yield\/\" data-gt-translate-attributes='[{\"attribute\":\"data-cmtooltip\", \"format\":\"html\"}]' tabindex=\"0\" role=\"link\">yield<\/a>s fall; when prices fall, yields rise. Yields are the most-watched indicator in fixed-income markets and drive expectations about interest rates, <a class=\"glossaryLink\" href=\"https:\/\/lemonn.co.in\/blog\/glossary\/inflation\/\" data-gt-translate-attributes='[{\"attribute\":\"data-cmtooltip\", \"format\":\"html\"}]' tabindex=\"0\" role=\"link\">inflation<\/a>, and even <a class=\"glossaryLink\" href=\"https:\/\/lemonn.co.in\/blog\/glossary\/equity\/\" data-gt-translate-attributes='[{\"attribute\":\"data-cmtooltip\", \"format\":\"html\"}]' tabindex=\"0\" role=\"link\">equity<\/a> valuations. Indian investors should understand bond yields to make se<a class=\"glossaryLink\"  href=\"https:\/\/lemonn.co.in\/blog\/glossary\/nse\/\"  data-gt-translate-attributes='[{\"attribute\":\"data-cmtooltip\", \"format\":\"html\"}]'  tabindex='0' role='link'>nse<\/a> of debt funds, <a class=\"glossaryLink\" href=\"https:\/\/lemonn.co.in\/blog\/glossary\/fixed-deposit\/\" data-gt-translate-attributes='[{\"attribute\":\"data-cmtooltip\", \"format\":\"html\"}]' tabindex=\"0\" role=\"link\">fixed deposit<\/a>s, and broader economic news.<\/p>\n<div><strong>Key takeaways:<\/strong>\n<ul>\n<li>Bond yield is the return earned from holding a bond, expressed annually.<\/li>\n<li>Yields and bond prices move in opposite directions.<\/li>\n<li>Government bond yields are the <a class=\"glossaryLink\" href=\"https:\/\/lemonn.co.in\/blog\/glossary\/benchmark\/\" data-gt-translate-attributes='[{\"attribute\":\"data-cmtooltip\", \"format\":\"html\"}]' tabindex=\"0\" role=\"link\">benchmark<\/a> for risk-free rates.<\/li>\n<li><a class=\"glossaryLink\" href=\"https:\/\/lemonn.co.in\/blog\/glossary\/yield-curve\/\" data-gt-translate-attributes='[{\"attribute\":\"data-cmtooltip\", \"format\":\"html\"}]' tabindex=\"0\" role=\"link\">Yield curve<\/a> shape signals economic expectations.<\/li>\n<li>Rising yields generally hurt equity valuations; falling yields support them.<\/li>\n<\/ul>\n<\/div>\n<h2 id=\"types-of-bond-yield\">Types of bond yield<\/h2>\n<ul>\n<li><strong>Coupon yield:<\/strong> Annual coupon &#xF7; <a class=\"glossaryLink\" href=\"https:\/\/lemonn.co.in\/blog\/glossary\/face-value\/\" data-gt-translate-attributes='[{\"attribute\":\"data-cmtooltip\", \"format\":\"html\"}]' tabindex=\"0\" role=\"link\">face value<\/a> (fixed at issuance).<\/li>\n<li><strong>Current yield:<\/strong> Annual coupon &#xF7; current market price.<\/li>\n<li><strong><a class=\"glossaryLink\" href=\"https:\/\/lemonn.co.in\/blog\/glossary\/yield-to-maturity\/\" data-gt-translate-attributes='[{\"attribute\":\"data-cmtooltip\", \"format\":\"html\"}]' tabindex=\"0\" role=\"link\">Yield to maturity<\/a> (YTM):<\/strong> The total return assuming you hold the bond to maturity. Most commonly quoted yield.<\/li>\n<li><strong>Yield to call (YTC):<\/strong> Return assuming the bond is called early.<\/li>\n<\/ul>\n<h2 id=\"why-yields-and-prices-move-inversely\">Why yields and prices move inversely<\/h2>\n<p>A bond with a fixed 7% coupon and &#8377;1,000 face value pays &#8377;70 per year. If new <a class=\"glossaryLink\"  href=\"https:\/\/lemonn.co.in\/blog\/glossary\/bonds\/\"  data-gt-translate-attributes='[{\"attribute\":\"data-cmtooltip\", \"format\":\"html\"}]'  tabindex='0' role='link'>bonds<\/a> in the market offer 8% (because rates rose), no one will pay &#8377;1,000 for a 7% bond. Its price falls until the implied yield matches the new 8% benchmark. Hence falling prices = rising yields, and vice versa.<\/p>\n<h2 id=\"the-yield-curve\">The yield curve<\/h2>\n<p>The yield curve plots yields across different maturities &#x2014; 3 months, 1 year, 5 years, 10 years, 30 years.<\/p>\n<ul>\n<li><strong>Upward sloping (normal):<\/strong> Long-term yields higher; economy expanding.<\/li>\n<li><strong>Flat:<\/strong> Similar yields across maturities; uncertain outlook.<\/li>\n<li><strong>Inverted:<\/strong> Short-term yields exceed long-term; historically a <a class=\"glossaryLink\" href=\"https:\/\/lemonn.co.in\/blog\/glossary\/recession\/\" data-gt-translate-attributes='[{\"attribute\":\"data-cmtooltip\", \"format\":\"html\"}]' tabindex=\"0\" role=\"link\">recession<\/a> warning.<\/li>\n<\/ul>\n<h2 id=\"yields-and-equity-markets\">Yields and equity markets<\/h2>\n<p>Higher bond yields raise discount rates used in equity valuation models, often compressing PE multiples. They also offer fixed-income investors a competing return, drawing money out of equities. Falling yields tend to support equities &#x2014; which is why central <a class=\"glossaryLink\" href=\"https:\/\/lemonn.co.in\/blog\/glossary\/bank-rate\/\" data-gt-translate-attributes='[{\"attribute\":\"data-cmtooltip\", \"format\":\"html\"}]' tabindex=\"0\" role=\"link\">bank rate<\/a> cuts often trigger equity rallies.<\/p>\n<h2 id=\"how-retail-investors-should-think-about-yields\">How retail investors should think about yields<\/h2>\n<ul>\n<li>Track the 10-year G-Sec yield as the benchmark for India.<\/li>\n<li>Compare bank FD rates against G-Sec yields to evaluate value.<\/li>\n<li>Use yields to assess debt fund holdings &#x2014; duration risk depends on yield direction.<\/li>\n<li>Be cautious of high-yield corporate bonds: higher yield reflects higher credit risk.<\/li>\n<\/ul>\n<h2 id=\"examples-and-current-context\">Examples and current context<\/h2>\n<p>If the 10-year G-Sec yield rises from 7.0% to 7.5%, existing bond prices fall noticeably; long-duration debt funds may see negative monthly returns. Conversely, a fall from 7.5% to 7.0% boosts those same funds. Equity-heavy investors should monitor the G-Sec yield as a macro signal even if they don&#x2019;t own bonds directly.<\/p>\n<h2 id=\"frequently-asked-questions\">Frequently asked questions<\/h2>\n<div>\n<h3 id=\"why-are-bond-yields-important-even-for-equity-investors\">Why are bond yields important even for equity investors?<\/h3>\n<p>They influence valuations, <a class=\"glossaryLink\" href=\"https:\/\/lemonn.co.in\/blog\/glossary\/sector\/\" data-gt-translate-attributes='[{\"attribute\":\"data-cmtooltip\", \"format\":\"html\"}]' tabindex=\"0\" role=\"link\">sector<\/a> rotations, and macro narratives that drive stock prices.<\/p>\n<h3 id=\"where-can-i-see-indian-bond-yields\">Where can I see Indian bond yields?<\/h3>\n<p>NSE, CCIL, RBI, and major business news sites publish daily G-Sec yields.<\/p>\n<h3 id=\"does-lemonn-offer-bonds\">Does Lemonn offer bonds?<\/h3>\n<p>Lemonn focuses on equities, F&amp;O and <a class=\"glossaryLink\" href=\"https:\/\/lemonn.co.in\/blog\/glossary\/mutual-fund\/\" data-gt-translate-attributes='[{\"attribute\":\"data-cmtooltip\", \"format\":\"html\"}]' tabindex=\"0\" role=\"link\">mutual fund<\/a>s; debt mutual funds and ETFs give bond exposure.<\/p>\n<h3 id=\"what-is-a-good-yield\">What is a good yield?<\/h3>\n<p>It depends on risk and time. Compare apples to apples &#x2014; same credit rating and maturity.<\/p>\n<\/div>\n","protected":false},"excerpt":{"rendered":"<p>Bond yield is the return an investor earns from holding a bond, expressed as a percentage. It moves inversely to bond prices &#x2014; when prices rise, yields fall; when prices fall, yields rise. Yields are the most-watched indicator in fixed-income markets and drive expectations about interest rates, inflation, and even equity valuations. Indian investors should [&#x2026;]<\/p>\n","protected":false},"author":3,"featured_media":0,"menu_order":0,"template":"","meta":{"_uag_custom_page_level_css":"","footnotes":""},"class_list":["post-12180","glossary","type-glossary","status-publish","hentry"],"blocksy_meta":[],"uagb_featured_image_src":{"full":false,"thumbnail":false,"medium":false,"medium_large":false,"large":false,"1536x1536":false,"2048x2048":false,"web-stories-poster-portrait":false,"web-stories-publisher-logo":false,"web-stories-thumbnail":false},"uagb_author_info":{"display_name":"Team Lemonn","author_link":"https:\/\/lemonn.co.in\/blog\/author\/ashu\/"},"uagb_comment_info":0,"uagb_excerpt":"Bond yield is the return an investor earns from holding a bond, expressed as a percentage. It moves inversely to bond prices &#x2014; when prices rise, yields fall; when prices fall, yields rise. Yields are the most-watched indicator in fixed-income markets and drive expectations about interest rates, inflation, and even equity valuations. Indian investors should&hellip;","_links":{"self":[{"href":"https:\/\/lemonn.co.in\/blog\/wp-json\/wp\/v2\/glossary\/12180","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/lemonn.co.in\/blog\/wp-json\/wp\/v2\/glossary"}],"about":[{"href":"https:\/\/lemonn.co.in\/blog\/wp-json\/wp\/v2\/types\/glossary"}],"author":[{"embeddable":true,"href":"https:\/\/lemonn.co.in\/blog\/wp-json\/wp\/v2\/users\/3"}],"version-history":[{"count":0,"href":"https:\/\/lemonn.co.in\/blog\/wp-json\/wp\/v2\/glossary\/12180\/revisions"}],"wp:attachment":[{"href":"https:\/\/lemonn.co.in\/blog\/wp-json\/wp\/v2\/media?parent=12180"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}