Yield Definition
When it comes to investments, your yield is the return on your investment. In other words, it’s the amount of money you make from investing in a security, like a bond or stock. For example, if you buy a $1,000 bond with a 5% coupon rate and hold it until it matures, you’ll earn $50 in interest each year. When it comes to stocks, your yield is the dividend payments you receive divided by the price you paid for the stock. For example, if you buy a stock for $100 that pays out $5 in dividends each year, your yield would be 5%.
