yield to maturity

The internal rate of return on a bond held to maturity, assuming scheduled payment of principal and interest.

A calculation of yield on a bond that takes into account the capital gain or loss on a discount bond or capital loss on a premium bond. In the case of a discount bond, the yield-to-maturity, YTM, is higher than the current yield, or the coupon yield. The reverse is true for a premium bond with YTM lower than both current yield and coupon yield.