Yield

In finance, the term yield refers to a profit earned on an investment. This term is most commonly used in relation to interest earned on bonds, though it can refer to returns on any investment.

In the case of bonds, yields are usually listed as a percentage of the bond’s face value on a regular basis (running yields). Other securities may have flat-rate yields or variable yields. In the case of interest-earning investment vehicles like savings accounts and retirement accounts, the yield is made up of the money you earn in interest. Yields on real estate are made up of the rents collected.

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Daniel Dreier is editor and personal finance expert at moneyland.ch.

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