Yield to Maturity (YTM) is the total expected annual return on a Sovereign Gold Bond if held until maturity, expressed as a percentage.

YTM combines: 1. The 2.5% annual interest income 2. Capital gain/loss (difference between purchase price and maturity value) 3. Time value of money

For SGBs, YTM is calculated assuming gold price remains constant (for simplicity) or using expected gold price appreciation.

Higher YTM indicates better expected returns. SGBs trading at significant discounts typically show higher YTM.

YTM is useful for comparing: - Different SGB series with varying discounts - SGBs vs other fixed income instruments - Expected total returns over the holding period