Yield Meaning: Produce, Give Way, or Earn a Return

Yield meaning across its main senses

1. To produce or provide. "These orchards yield about ten tonnes of mangoes a year." "The survey yielded some surprising results."
2. To give way or surrender. "After hours of debate, the committee yielded to public pressure." "The fort finally yielded."
3. To bend or break under force. "The old floorboards yielded under his weight."
4. To let other traffic go first. In the US, a triangular Yield sign tells drivers to slow and give priority. The UK and India use a Give Way sign for the same rule.
5. Noun: the amount produced. Crop yield, milk yield, the yield of a chemical reaction.
6. Noun: investment return. The income an investment pays, expressed as a percentage of its price or value.

Example sentences

• Better seeds helped the village raise its rice yield by a fifth.
• Ten minutes of searching yielded nothing but an old receipt.
• She refused to yield on the main point but agreed to small changes.
• Always yield to pedestrians at a zebra crossing.
• Savers are moving money into bonds because yields have gone up.

Yield in finance: how it works

In investing, yield measures the income you receive compared with what the investment costs or is worth. It helps you compare very different assets on one scale. Common types include:

• Current yield on a bond: yearly interest divided by the bond's current market price.
• Yield to maturity: the total return you would earn if you held the bond until it repaid, counting interest and any gain or loss on price.
• Dividend yield on shares: yearly dividend per share divided by the share price.
• Rental yield on property: yearly rent divided by the property's value.

A key rule: when a bond's price falls, its yield rises, and when the price rises, the yield falls, because the fixed interest payment is being compared with a different price. Yields are closely watched alongside inflation, since a yield below inflation means your money loses buying power. Related ideas include annuity and portfolio.

Worked examples: bond and rental yield

Bond. A bond pays $50 interest a year.

1. If you buy it for $1,000, current yield = 50 divided by 1,000 = 5 percent.
2. If its market price drops to $950, a new buyer's yield = 50 divided by 950, about 5.26 percent.
3. If the price climbs to $1,050, the yield falls to about 4.76 percent.

Rental property. A flat is worth Rs 60,00,000 and rents for Rs 15,000 a month.

1. Yearly rent = 15,000 times 12 = Rs 1,80,000.
2. Gross rental yield = 1,80,000 divided by 60,00,000 = 3 percent.
3. Subtract maintenance, taxes and empty months to get the lower net yield.

Origin: a word that began with paying

Yield comes from Old English gieldan, meaning to pay or repay, and the early noun meant a payment, tax or rent. From paying, the verb grew to mean giving something up, then giving way to a stronger force, and by around 1300 also to produce or bring forth, as land gives its produce in return for labour. The investment sense, income paid on capital, quietly returns to the oldest idea of payment.

Easy mixes and set phrases

• Yield vs field: they rhyme, and both are spelled -ield. Remember "i before e" here.
• Yield to vs yield up: yield to means give way to; yield up is formal for hand over, as in "the ruins yielded up their secrets."
• High yield: means high income but often higher risk, as with high yield bonds.
• Yield is not profit: a property can have a good rental yield and still lose value. Yield measures income, not total gain. For income in a business, see revenue.

More money terms are collected in business and money, our finance word list.