BTP yield calculator
Enter the price, coupon and maturity of an Italian government bond (BTP): the calculator finds the gross yield to maturity and the yield net of the 12.5% tax, with the accrued interest you pay on purchase, the coupons you will receive and the duration.
As a percentage of nominal: 97.50
The bond's rate: 3.5 for a 3.5% BTP
Gross yield
3.89%
To maturity, annual
Net yield
3.40%
After 12.5% on coupons and gain
Net coupons in a year
€ 306.25
On the nominal entered
Modified duration
7.01
% price change per 1 point of yield
Until maturity
| Item | Amount |
|---|---|
| Purchase cost (price, accrued interest and fees) | € 9,793.51 |
| of which accrued interest | € 43.51 |
| Net coupons (17) | € 2,603.13 |
| Net redemption at maturity | € 9,968.75 |
| Net gain | € 2,778.37 |
Estimates for information only, not financial or tax advice: the results depend on the assumptions entered, and past returns do not guarantee future ones.
How yield to maturity is worked out
The yield to maturity is the rate that makes two things equal: what you pay for the bond today, and the present value of everything you will receive, that is the coupons until maturity and the redemption at 100.
That is why it depends on the price. A bond bought below par, say at 95, yields more than its coupon, because it is redeemed at 100: the difference is a gain on top of the coupons. Bought above par, it yields less than its coupon, because at maturity you lose the difference between the price paid and 100.
The calculator uses the actual coupon dates, counted back from maturity: the first coupon comes after a fraction of a period, and the yield is solved on the price actually paid, accrued interest and fees included.
Gross and net: the 12.5% tax
For an Italian tax resident, the coupons of Italian government bonds, and of those of countries that exchange tax information with Italy, are taxed at 12.5% instead of 26%. The gain between the purchase price and the redemption at 100 is also taxed at 12.5%.
The net yield takes 12.5% off each coupon and, when bought below par, off the gain at redemption. Bought above par, the difference lost at maturity is a capital loss that can offset future gains: the calculator does not count its value, since it depends on your other trades.
Clean price, accrued interest and dirty price
The price quoted on the market is the clean price: it leaves out the interest accrued since the last coupon. When you buy, you also pay the accrued interest, the part of the next coupon already earned, which comes back to you when the coupon is paid.
That is why the purchase cost in the summary is higher than price times nominal: it includes accrued interest and fees. Interest accrues up to the settlement date, usually two business days after the trade on the Italian MOT market.
Duration: how much the price moves with rates
The modified duration tells you by what percentage the bond's price changes if market yields move by one point. With a duration of 7, a one-point rise in rates lowers the price by about 7%. It matters if you sell before maturity: held to redemption, the yield stays the one worked out at purchase.
What the calculation leaves out
- The 0.2% annual stamp duty on the bond's value, which lowers the yield by about 0.2 points a year: you can estimate it with the stamp duty calculator.
- Variable coupons: inflation-linked BTPs (BTP Italia, BTP€i) and step-up ones (BTP Valore) pay coupons that change over time; here the coupon is fixed.
- Reinvestment: the yield to maturity assumes coupons are reinvested at the same rate, which in practice depends on future rates.
- Corporate bonds, taxed at 26% rather than 12.5%.
Frequently asked questions
Why isn't the net yield just the coupon minus 12.5%?
Because the purchase price is hardly ever 100. Bought below par you also get a gain at maturity, above par a loss; the accrued interest paid and the time left to maturity count too. The net yield puts all of this together.
Can I use it for BOT bills?
Yes: BOTs pay no coupon, so set the coupon to 0. The whole yield then comes from the difference between the price and the redemption at 100, taxed at 12.5%.
Is stamp duty included in the net yield?
No. The 0.2% annual stamp duty is paid on the value of the whole securities account, not on a single bond: subtract it separately, about 0.2 percentage points a year.
Which settlement date should I enter?
The date on which the bond and the money change hands: for a purchase on the Italian MOT market it is usually two business days after the order. Accrued interest is counted up to that date.
Does it work for other countries' government bonds?
For an Italian tax resident, yes for those of countries that exchange tax information with Italy, which are also taxed at 12.5%. Corporate and supranational bonds follow other rules: corporate bonds are taxed at 26%.
Your bonds, worked out automatically
In PortFolk every bond in the portfolio has its yield to maturity, duration and accrued interest worked out from your trades, and its coupons show in the calendar with those received and those to come.
The demo is a sample portfolio, already filled in: it opens without signing up. The Free plan asks for no card.
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