Definition
The income an investment produces per year as a percentage of its price: interest from savings and bonds, dividends from stocks. Chasing unusually high yield always means accepting unusual risk, seen or unseen.
Why it matters
Yield is the honest way to compare income across assets, and an unusually high one is a warning label, not a gift. Markets do not hand out extra income without attaching extra risk somewhere.
Example
A saver comparing a 4.5% HYSA, a 4.8% Treasury ladder, and a fund advertising 12% yield should ask what risk pays for the 12%. The answer (leverage, junk credit, or return of your own capital) is always something.
Related terms
This definition is educational, not financial, legal, or tax advice. U.S. rules and limits change; verify time-sensitive details with official sources. See our disclaimer.