The Treasury Return Calculator below uses long run 10-year Treasury Data from Robert Shiller to compute returns based on reinvesting the coupon payments. You can see the total returns for the 10 Year Treasury for any arbitrary period from 1871 until today.
Editor: Last data is 2/6/2024 closing price.
(If you are looking for a similar calculator for the S&P 500, Dow Jones Industrial Average, Gold, or Daily Inflation we’ve got that too.
The 10-Year Treasury Return Calculator (With Inflation Adjustment and Coupon Payment Reinvestment)
One issue you run into a lot when you are discussing optimal savings strategies is the inability to produce a fair comparison (or, at least, not pay someone for one) – especially when it comes to bonds and treasuries. In the case of the 10-Year Treasury, investors will eyeball a chart of historic yields but past that point it’s hard to figure out what the returns for ‘staying in the market’ would be without, at minimum, a spreadsheet program. Let’s fix that today.
Here are the values the tool computes:
- Reinvested 10 Year Treasury Return – The total price return of 10 Year Treasuries over the time-frame you chose. So if you buy and sell the same month, it’ll be 0.
- Annualized 10 Year Treasury Return – The total price return of 10 Year Treasuries (as above), annualized. This number basically gives your ‘return per year’ if your time period was compressed or expanded to a 12 month timeframe.
- Inflation Adjusted (CPI)? – Whether the calculation you did is using CPI adjusted values gathered by Shiller, or showing return before inflation. Hit the checkbox above the buttons to turn on or off the inflation adjustment, and rerun the calculator for the opposite adjustment.
Methodology for the Treasury Return Calculator
Professor Shiller lists his methodology on his site – all values internal to this tool use the values he provided. One thing to note is that the month’s ’10-Year Yield Price’ isn’t the price on a particular day, but the blended average of daily yields, comparable to the 10 Year Yields (also known as ‘constant maturity‘) which you can find at the Treasury’s site.
What does that mean? It means, in short, these numbers are ‘fake’ – they are a blend of the yields available throughout the months (on ‘average’), had a new 10 year note even been sold that month.
You can reproduce the monthly values using St. Louis FRED and the 10 Year Constant Maturity yield. Try: // Aggregate with Monthly // Aggregate with Average
A 10 Year Treasury note pays a coupon every 6 months. The calculator assumes bonds are bought at face value with no transaction fees and a tax rate of 0%. Since we only have a 10-year yield number, we had to take some liberties when calculating bond prices – we properly compute dirty and clean prices of the bonds, but we are assuming that bonds are sold at the 7 year mark asking for the 10 year yield. Why does that matter? Using the 10 year yield at the 7 year mark assumes a flat yield curve. For an example of this method breaking down, see the constant maturity series for 1/02/2013 – the 10 year prevailing yield was 1.86%, but the 7 year yield was 1.25%. If you have yield curve data going back to 1871 feel free to excoriate me (just be sure to release that data into the public domain so I can use it!)… otherwise, deal with it.
How to Use This Data
As we mentioned above, there isn’t much in the way of good Treasury Yield Curve data going back to 1871 – so we don’t have a great way of determining how, exactly, to price 10 year treasuries with roughly 7 years to maturity. With that in mind, this data is best used as an approximation of how an investor would have fared, than the ultimate arbiter of investor returns. However – you should have guessed that anyway, since the resolution is only one month.
Considering these shortcomings, please look at this data as a ‘decent approximation’ of returns from the past. Remember, just like with stocks, the time of day, the weather, general sentiment, daily inflation, and numerous other factors would affect the price of a security at any point in time – including the actual purchase of that security.
Thank Yous
To Robert Shiller, of course, for posting his data publicly.
To Jim at Free By 50, who assisted with some assumptions.
Is this a useful tool? Anything else you’d like to see added to the Treasury Return Calculator?
FAQs
To calculate yield, subtract the bill's purchase price from its face value and then divide the result by the bill's purchase price. Finally, multiply your answer by 100 to convert it to a percentage.
How to calculate T-bill returns? ›
Calculating T-bill Returns
T-bills do not have coupon payments; instead, they are issued at a discount. Therefore, the yield that you get at maturity is the difference between the purchase price and the face value.
How is the Treasury coupon calculated? ›
It is fixed when the bond is issued and is calculated by dividing the sum of the annual coupon payments by the par value. At the time it is purchased, a bond's yield to maturity (YTM) and its coupon rate are the same.
How much will I make on a 3 month treasury bill? ›
3 Month Treasury Bill Rate is at 5.25%, compared to 5.25% the previous market day and 5.10% last year. This is higher than the long term average of 4.19%.
How do you calculate real return on government bonds? ›
To find the real (rather than nominal) yield of any bond, calculate the annual growth and subtract the rate of inflation. This is easier for inflation-adjusted bonds than it is for non-adjusted bonds, which are only quoted in nominal changes.
How do I calculate my return? ›
Key Takeaways. Return on investment (ROI) is an approximate measure of an investment's profitability. ROI is calculated by subtracting the initial cost of the investment from its final value, then dividing this new number by the cost of the investment, and finally, multiplying it by 100.
What is the coupon equivalent of the T-bill? ›
The Bank Equivalent, also called Bond Equivalent, the Coupon Equivalent, or the Investment Yield, is the bill's yield based on the purchase price, discount, and a 365- or 366-day year.
How do you earn a return on a T-bill? ›
You buy bills at a discount — a price below par — and profit from the difference at the end of the term. While T-bills don't pay interest like other Treasurys, the difference between your discounted price and the par value is essentially the "interest" earned.
What is the average return on the T-bill? ›
Basic Info
10 Year Treasury Rate is at 4.69%, compared to 4.63% the previous market day and 3.59% last year. This is higher than the long term average of 4.25%.
What is the coupon rate formula? ›
The coupon rate is calculated by adding up the total amount of annual payments made by a bond, then dividing that by the face value (or “par value”) of the bond.
A Treasury bond pays a "coupon rate." This is the percentage return paid to the investor periodically until its maturity date. Treasury bonds also are traded in the market. As fewer payments remain to be made, its yield falls, as does its value in the market. At the same time, market forces affect the value of T-bonds.
What is the difference between coupon and yield Treasury? ›
What Is the Difference Between Coupon Rate and Yield? The coupon rate is the stated periodic interest payment due to the bondholder at specified times. The bond's yield is the anticipated rate of return from the coupon payments alone, calculated by dividing the annual coupon payment by the bond's current market price.
Are 3 month T-bills a good investment? ›
The Bottom Line. Treasury Bills, or T-bills, represent short-term debt obligations by the Treasury. Because the U.S. government backs them, they are considered extremely low-risk, although they also have relatively low returns.
Are T-bills better than CDs? ›
T-bills have a key advantage over CDs: They're exempt from state income taxes. The same is true with Treasury notes and Treasury bonds. If you live in a state with income taxes, and rates are similar for CDs and T-bills, then it makes sense to go with a T-bill.
How much can you make on a 4 week Treasury bill? ›
4 Week Treasury Bill Rate is at 5.28%, compared to 5.28% the previous market day and 4.32% last year. This is higher than the long term average of 1.41%. The 4 Week Treasury Bill Rate is the yield received for investing in a US government issued treasury bill that has a maturity of 4 weeks.
How to calculate interest rate on T-bills? ›
Face Value Redemption and Interest Rate
For example, suppose an investor purchases a 52-week T-bill with a face value of $1,000. The investor paid $975 upfront. The discount spread is $25. After the investor receives the $1,000 at the end of the 52 weeks, the interest rate earned is 2.56% (25 / 975 = 0.0256).
What is real return on Treasuries? ›
The so-called "real" risk-free rate can be calculated by subtracting the current inflation rate from the yield of the Treasury bond matching your investment duration.
How much do you make on a 4 week Treasury bill? ›
4 Week Treasury Bill Rate is at 5.28%, compared to 5.28% the previous market day and 4.32% last year. This is higher than the long term average of 1.41%. The 4 Week Treasury Bill Rate is the yield received for investing in a US government issued treasury bill that has a maturity of 4 weeks.
What is the formula for Treasury bond yield? ›
Yield is a figure that shows the return you get on a bond. The simplest version of yield is calculated by the following formula: yield = coupon amount/price. When the price changes, so does the yield.
