What is 'maturity value'? Definition & meaning

What's the maturity value of a bond?

The maturity value of a bond is the amount of money that an investor will be repaid when a bond’s term ends.

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The maturity value may also be called a bond’s face value, the principal, or par.

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This value is typically reflective of the amount of money that has been borrowed by the issuer of the bond, excluding interest payments.

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In the case of a zero coupon bond, the maturity value represents both the original amount borrowed, plus an additional sum that represents the return on the bond that the borrower receives in return for the loan.

More terms

Real Estate Investment Trust (REIT)

An investment trust specialised in investing in commercial property such as parking garages or GP offices.

Dirty price

The total price payable on the purchase of a gilt. It’s calculated as the clean price plus accrued interest.

DMO

The United Kingdom Debt Management Office. It’s an executive agency responsible for managing the government’s debt and cash needs, primarily through issuing gilts and Treasury bills.

Quick ratio

Learn what quick ratio stands for in financial terms and how to calculate it.

Profit and Loss Statement (P&L)

A statement that summarises firm's expenses, costs, and revenues incurred during a time period. AKA income statement.

Yield

Income from an investment as a percentage of its current price.

Synthetic ETFs

An ETF that that reproduces the return of an index through the use of swaps.

Accrued interest

The interest earned on a gilt since the last dividend date. When buying a gilt, the buyer pays the accrued interest at the time of a transaction to the seller in addition to the clean price of the gilt

Compound interest

Understand what compound interest means and how it's calculated

Maturity value