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Yield
FinanceSource: Fixed-income fundamentals
Yield shows the percentage return expected from a Government bill held until its end date.
Example
You pay $98 for a bill that returns $100 at its end date. The extra $2 is the return its yield describes.
How it fits in
A Government bill is bought below the amount it pays at maturity. Its quoted yield helps compare that return with its price and time to maturity. Selling early can change the amount received, so the original quote is not a promise about an early sale.
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Related terms
Compound Interest
When the money you earn from saving starts earning its own money on top.
Simple Interest
Interest paid only on the original amount, never on the interest you have already earned.
Needs vs Wants
Needs are the things that keep you safe and well. Wants make life nicer. Mixing them up is what empties most budgets.