# How to Understand Bond Yield Rates V Rates

Post on: 18 Февраль, 2017 ## Instructions

Understand that a bond yield rate is your annual return on your bond, expressed as a percentage. In theory, the longer you hold a bond, the higher your yield rate over time. That is because you take on more risk for holding the bond longer.

Know that if your par value changes, your yield changes accordingly. That means you get more yield if your par value lowers, and less yield if your par value increases. For instance, if your par value decreases to \$300, your yield increases to 8.3%—giving you more yield per year, but a reduced value paid to you at your bond’s maturity date.

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