Treasury STRIP Yield to Maturity Calculator

Convert the discount you paid for a Treasury STRIP into an annualized yield, total accreted interest, and a back-of-the-envelope federal tax bill. Provide the purchase price per $100 of face value and the remaining years to maturity. Optionally adjust the par amount and your marginal tax rate to tailor the maturity proceeds and imputed income.

Price paid today for $100 of maturity value on the Treasury STRIP.
Whole or fractional years until the STRIP redeems at par.
Defaults to $100. Enter a custom redemption amount if you priced the STRIP on another par value.
Defaults to 24%. Used to estimate the tax owed on accreted interest reported annually.

For illustration only. Treasury STRIP taxation rules can change and may require accrual each tax year; confirm details with a tax advisor.

Examples

  • Example 1 — $92.50 purchase price, 7 years to maturity, defaults for face and tax ⇒ Annual yield to maturity: 1.12% | Accreted interest at maturity: $7.50 | Estimated federal tax on accretion: $1.80 | Redemption value received: $100.00
  • Example 2 — $86.20 purchase price, 12.5 years, $1,000 face, 32% tax rate ⇒ Annual yield to maturity: 1.19% | Accreted interest at maturity: $913.80 | Estimated federal tax on accretion: $292.42 | Redemption value received: $1,000.00

FAQ

Does this calculator assume semiannual compounding like coupon Treasuries?

No. STRIPS accrue as zero-coupon bonds, so the yield is expressed on an annual basis using the discount-to-maturity relationship without coupon reinvestment assumptions.

How do state taxes factor into STRIP income?

Most states exempt Treasury income, so the optional tax field focuses on federal liability. Adjust the rate upward if you owe state or local income taxes on accreted interest.

What if I bought STRIPS at a face amount other than $100?

Enter the actual par value you hold in the optional face value field and the calculator recalculates accretion, taxes, and redemption proceeds on that balance.

Can I estimate after-tax yield with this tool?

Divide the net accretion after the estimated tax by the purchase price and annualize across the holding period to approximate an after-tax yield.

Additional Information

  • Treasury STRIPS accrete toward par with no coupon payments, so the entire discount is treated as imputed interest.
  • Annual yield assumes a straight annual compounding convention consistent with strip quotes.
  • Imputed interest is typically taxable each year even though cash is received only at maturity.
  • Face value defaults to $100 so the output aligns with standard quote sheets unless you enter a custom redemption amount.

Related calculators