BTP Yield Calculator

Yield to maturity is the single annual rate that, compounding on your purchase price, reproduces every coupon and the final redemption exactly, so it summarizes a stream of separate cash flows into one comparable number. Because BTPs pay two coupons a year, the calculator first solves for the rate over a semiannual period and then annualizes it as (1 + semiannual rate)^2 - 1, the effective annual convention. That matches how Borsa Italiana quotes the rendimento effettivo a scadenza on the MOT market, rather than the bond-equivalent yield (2 times the semiannual rate) used in some other markets, so figures from the two conventions are not directly comparable.

The gross yield to maturity ignores tax; the net yield solves the same equation over after-tax cash flows. Italy taxes coupon income and capital gains on government bonds at a substitute rate, 12.5% by default here under D.Lgs. 239/1996, well below the 26% charged on most other investment income. That gap compounds over the whole holding period, so the net figure typically lands well below the gross one even at a modest tax rate. Change the tax rate in the advanced section if yours differs, and verify the current rate before acting on the result.

Paying more than 100 per 100 of nominal locks in a capital loss at redemption, since the bond still repays exactly 100. The calculator shows that loss as a negative net capital gain and applies no tax credit against it: offsetting a bond loss against other gains depends on your full tax position outside this bond and is not modeled here. A price below par has the opposite effect, and the capital gain at redemption is taxed at the same rate as the coupons.

When you settle partway through a coupon period, you pay the seller the accrued interest they earned since the last coupon, on top of the clean price, and that accrued amount is added to your outlay. On the following coupon, the tax regime deducts the accrued interest you already paid from that coupon's taxable base, so only the interest you actually earned as the new holder gets taxed. Turn on buy between coupon dates and enter the days since the last coupon to see both effects; the calculator uses a 182.5-day semiannual period rather than the exact calendar day count, which is accurate to well under half a percent of one coupon.

Borsa Italiana publishes live and end-of-day prices for every listed BTP on its MOT market pages, alongside the coupon rate, maturity date, and the ISIN code that identifies the specific issue. The Ministero dell'Economia e delle Finanze also lists every outstanding BTP on its Dipartimento del Tesoro site, with the original issuance terms. Use the clean price rather than the price you would actually settle at, since this calculator adds accrued interest separately when you turn that option on.

It assumes you hold to redemption, so it does not model selling the bond early or the price risk that would create. It does not offset a capital loss against other gains, does not cover BTP Italia or BTP Valore, which pay step-up coupons and inflation-linked adjustments, or floating-rate CCTs, and it approximates accrued interest with an even 182.5-day semiannual period instead of real calendar dates. Treat the result as a hold-to-maturity estimate for a plain fixed-coupon BTP, not a substitute for your broker's confirmation or a tax advisor's reading of your specific position.