## What Is YIELD Function In Excel?

The

YIELDfunction in Excel belongs to the category ofFinancialfunction. It determines the yield on security, paying periodic interest. Users can apply the ExcelYIELDfunction for evaluating a bond yield, which helps calculate the income generated in a year as the potential return.

For example, the table below contains the inputs required to determine a security’s yield (in percentage).

Suppose the requirement is to show the yield value in cell B12. Then considering the **Excel YIELD function definition**, applying the **YIELD() **in the target cell can help us achieve the required data.

In the above **Excel YIELD function example**, the function returns the yield value as a decimal number, **0.04877**, in the target cell B12. But once we set the cell B12 data format as **Percentage**, the decimal value converts into a percentage value, **4.88%**.

##### Table of contents

###### Key Takeaways

- The Excel
**YIELD**function evaluates the yield on a security that pays periodic interest. The function returns a decimal value. We can set the target cell data format, containing the**YIELD()**, as**Percentage**to get the required yield as a percentage value. - Users can utilize the
**YIELD()**to determine a bond yield and evaluate the annual income generated. - The
**YIELD()**accepts six mandatory arguments,**settlement**,**maturity**,**rate**,**pr**,**redemption**, and**frequency**, and one optional argument,**basis**, to calculate the yield. - The coupon payment frequency can be annual, semi-annual, or quarterly. On the other hand, we can supply five types of day count basis to the
**YIELD()**.

### YIELD() Excel Formula

The **Excel YIELD formula** is:

where,

**settlement**: It is the security’s settlement date, falling after the issue date. And that is when the security gets traded to the buyer.**maturity**: It is the security’s maturity date, i.e., the date when the security expires.**rate**: The annual coupon rate of the security.**pr**: The cost of the security per $100 face value.**redemption**: The redemption amount of the security per $100 face value.**frequency**: The count of coupon payments per year.**basis**: It indicates the day count basis type used by the security.

The first six arguments in the **Excel YIELD formula **are mandatory. On the other hand, the last argument is optional, and the function considers its default value as **0**.

And the following tables show the **frequency** and **basis** argument values we can use when applying the Excel** YIELD **function.

Furthermore, below are a few critical aspects that we must consider to avoid all conditions of the** Excel YIELD function not working**.

- Ensure to enter the date values using the
**DATE Excel function**to avoid entering the date as a text value. And we can supply the date arguments to the Excel**YIELD**function as cell references to dates or functions or formulas returning date values. - The arguments,
**frequency**, and**basis**get truncated to integers. And suppose the arguments**settlement**or**maturity**are serial numbers (date equivalent values), but not integer values. Then, they also get truncated. - If
**settlement**or**maturity**is an invalid date or any of the supplied arguments are non-numeric, the**YIELD()**returns the**#VALUE!**error. - The
**YIELD()**return value will be the**#NUM!**error in the following conditions:**settlement**>=**maturity****rate**<**0****pr**<=**0**or**redemption**<=**0****frequency**is not**1**,**2**, or**4****basis**is not**0**,**1**,**2**,**3**, or**4**

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### How To Use YIELD Excel Function?

The steps to apply the Excel** YIELD **function are:

- First, ensure the inputs for determining a security’s yield are accurate and in the required data formats.
- Then, select the target cell and enter the Excel
**YIELD**function. - Press
**Enter**to view the required security yield. - Finally, select the target cell and set the data format as
**Percentage**using the**Number Format**option in the**Home**tab to view the calculated security yield as a percentage.

Check out the following example to understand the **Excel YIELD function definition **and the steps to use the **YIELD()**.

The below table contains information about the security scheme for which we need to determine the yield.

And suppose we require to show the yield value in cell C13. Then here is how we can apply the **YIELD()** in the target cell and achieve the desired result.

**When we check the input data, we find that the first two arguments of the YIELD() are dates, and the third argument is a percentage value. On the other hand, the fourth and fifth arguments are currency values, and the last two are numbers. So, all the arguments are in the required data formats, thus avoiding the condition of the Excel YIELD function not working due to incorrect data formats.****Select the target cell C13, enter the following YIELD(), and press Enter.***=YIELD(D5,D6,D7,D8,D9,D10,D11)*

In this**Excel YIELD function example**, the number of coupon payments per year is semi-annual or half-yearly. And hence the**frequency**argument value is**2**. And as the day count basis type is the default value, the**basis**argument value is**0**.

Thus, based on the supplied argument values, the**YIELD()**returns the required security yield value as**0.0887**.

We can also provide the argument values directly to the**YIELD()**to achieve the above output.

Ideally, the suggestion is to supply the cell reference to the date values. But when providing the argument values directly, it is best to use the**DATE()**inside the**YIELD()**to avoid entering invalid dates.

Once we enter the formula in the target cell C13 until the argument**redemption**, separated by commas, we will get a drop-down list. We can use it to enter the**frequency**argument value by double-clicking the required option. Then, after we provide the**frequency**argument value and enter a comma, we will see another drop-down list to supply the**basis**argument value. Double-click on the required day count basis type, and we can finally close the parenthesis and press**Enter**to execute the**YIELD()**.

Alternatively, we can apply the**YIELD()**from the**Formulas**tab by selecting the target cell C13 and clicking**Formulas**→**Financial**→**YIELD**. This step will open the**Function Arguments**window.

Next, we must enter the**YIELD()**arguments in the**Function Arguments**window.

And once we click**OK**in the**Function Arguments**window, the**YIELD()**gets executed in the target cell C13.**Select cell C13 and set the data format as Percentage using the Number Format option in the Home tab.**

Thus, we get the required yield of the specific security scheme as a percentage value of**8.87%**.

### Examples

This section will show a few more examples of the Excel** YIELD **function.

#### Example #1

This example explains how to utilize the Excel** YIELD **function to determine the yield of a ten-year bond.

The table below contains the inputs required to calculate the ten-year bond yield.

Consider the specific bond’s issue date was 1/1/2010, and we purchased it six months later. So, the **settlement **date is **7/1/2010**, and the **maturity** date is **1/1/2020**. Also, assume the coupon payment frequency is annual and the day count basis is the default type.

And suppose we must display the resulting yield value in cell B13. Then we can use Excel** YIELD **function in the target cell to get the required outcome.

**Step 1:**Select the target cell B13, enter the**YIELD()**provided in the Formula Bar in the below image, and press**Enter**.

**Step 2:**Select cell B13 and set its data format as**Percentage**using the**Number Format**option in the**Home**tab.

Thus, for the given input values, the **YIELD() **returns the value **0.108466**. And once we set the target cell data format as **Percentage**, you get the ten-year bond yield, **10.85%**.

#### Example #2

Let us see the process of calculating a security’s yield with a quarterly coupon payment frequency using Excel** YIELD **function.

The following table contains the inputs required to find the yield of a security a person purchased on 3/15/2021, with an annual interest rate of 7%.

And suppose the requirement is to display the calculated yield value in cell B13. Then applying the Excel** YIELD **function in the target cell can fetch the required data.

**Step 1:**Select the target cell B13, enter the**YIELD()**provided in the Formula Bar in the below image, and press**Enter**.

**Step 2:**Select cell B13 and set its data format as**Percentage**using the**Number Format**option in the**Home**tab.

In this example, the coupon payment frequency is quarterly. And thus, the **frequency **argument value is **4**. Also, the argument **basis** takes the default value, **0**.

And thus, based on the given input, the yield of the specific security is **6.86%**.

#### Example #3

Let us see the different scenarios when the Excel** YIELD **function returns error values.

Suppose we need to enter the **YIELD()** argument values in the table below, calculate the specific security yield, and display the output in cell B13.

So, we will enter the **YIELD()**,with the required inputs supplied, in the target cell B13. However, the Excel** YIELD **function might throw errors if the source data contains incorrect values.

**settlement or****maturity –****Invalid Date**

Here, the maturity date is invalid; it is **11/31/2024** instead of **11/30/2024**, leading to the **YIELD()** returning the **#VALUE!** error.

**YIELD() Argument Values – Non-numeric**

In this case, the **basis **argument value should be **0**, but the supplied value is “**NIL**”, which makes the **YIELD()** throw the **#VALUE!** error.

**settlement Greater than or Equal To****maturity**

The above data shows that the **settlement **date falls after **maturity**, causing the **YIELD() **to return the **#NUM!** error.

**rate****Is Less Than****0**

In this case, the **rate** argument value is a negative percentage value, leading to the **YIELD()** throwing an error.

**pr or****redemption****Is Less or Equal To 0**

Here, the **YIELD()** output is the **#NUM!** error as the **pr **argument value is **0** instead of a value greater than zero.

**frequency Is Not 1, 2, or 4**

The **frequency** argument value can be 1, 2, or 4. However, as per the given input, the argument **frequency** is **3**, and thus the **YIELD()** output is an error value.

**basis Is Not 0, 1, 2, 3, or 4**

The supplied **basis** argument value is **6**, which is an incorrect value. The argument **basis** can be a value from** 0** to **4**.

Thus, the **YIELD()** will return the required value when we resolve the above issues.

### Important Things To Note

- It is best to supply the date arguments to the Excel
**YIELD**function as cell references to dates or formulas returning dates. And if entering the date values directly in the**YIELD()**, use the**DATE()**to avoid supplying invalid date values. - For invalid
**settlement**or**maturity**dates or non-numeric argument values, the**YIELD()**throws the**#VALUE!**error. - Suppose
**settlement**is greater or equal to**maturity**,**the rate**is less than**0**,**pr**or**redemption**<=**0**,**frequency**is not**1**,**2**, or**4**, or basis is not**0**,**1**,**2**,**3**, or**4**. Then the**YIELD()**return value will be the**#NUM!**error.

### Frequently Asked Questions (FAQs)

**1. Where is the YIELD function in Excel?**

The **YIELD** function in Excel is in the **Formulas** tab. We can select **Formulas** → **Financial** → **YIELD** to access the function.

**2. What is the settlement in the YIELD function in Excel?**

The **settlement** in the **YIELD** function in Excel indicates the date a buyer trades a coupon, such as a security or bond. For example, a 10-year bond issue date is 1/1/2010, and a buyer purchases it four months later. Then the **settlement** date will be 5/1/2010.

**3. How can you determine the yield of a security with a quarterly coupon payment frequency and Actual/actual basis type using the Excel YIELD function?**

We can determine the yield of a security with a quarterly coupon payment frequency and Actual/actual basis type using the Excel **YIELD** function in the following way.

Let us see the steps with an example.

The below table contains the required input for calculating the yield of a specific security.

In this example, the coupon payment frequency is quarterly. So, the **frequency **argument value is **4**. And the day count basis type is Actual/actual. Hence, the **basis** argument value is **1**.

Suppose the requirement is to show the calculated yield value in cell B13. Then, here is how we can apply the Excel **YIELD** function in the target cell and get the yield value.**• Step 1: **Select the target cell B13, enter the **YIELD()** provided in the Formula Bar in the below image, and press **Enter**.**• Step 2: **Select cell B13 and set the data format as **Percentage** using the **Number Format** option in the **Home** tab.

Thus, the **YIELD()** evaluates the yield of a security, with quarterly coupon payment frequency and Actual/actual day count basis type, as **3.86%**.

### Download Template

This article must be helpful to understand the **Excel YIELD Function**, with its formula and examples. You can download the template here to use it instantly.

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