Tax Equivalent Yield Calculator
Calculate the taxable yield needed to match the after-tax return of a tax-free investment. Compare municipal bonds vs taxable bonds.
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How to use this tool?
- 1 Enter the requested data in the fields above carefully.
- 2 Click the calculate button to process the information instantly.
- 3 Analyze the detailed result and the formula explanation presented below.
- 4 You can print, share, or even embed the calculator on your own site for free.
Unlike traditional static calculators, our tools adapt to specific user needs. They include detailed explanations of the formulas used, ensuring transparency in results. Furthermore, our design is focused on user experience, eliminating distractions and focusing on what really matters: your data and conclusions.
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Frequently Asked Questions
Tax equivalent yield is the pretax yield that a taxable bond must offer to equal the after-tax yield of a tax-free municipal bond. It helps investors compare bonds across different tax brackets.
Enter the tax-free yield (e.g., from a municipal bond) and your marginal tax rate. Click calculate to see the equivalent taxable yield you'd need to earn the same after-tax return.
Your marginal tax rate determines how much of your investment income is paid in taxes. A higher tax rate makes tax-free bonds more attractive, lowering the equivalent taxable yield needed.
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