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Maturity value

Maturity value

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

Balance sheet

A summary of a company's finances, including its assets, liabilities and shareholder equity.

Running yield

The annual interest payment (dividend) divided by the current market price of a bond.

Internal Rate of Return (IRR)

A means of calculating the potential future return on an investment.

American Depository Receipt (ADRs)

Tradeable assets that let Americans invest in overseas stocks using US laws and dollars.

Dirty price

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

Capital

Learn what financial capital means

Compound interest

Understand what compound interest means and how it's calculated

Retail Prices Index (RPI)

An index published each month by the Office for National Statistics, which measures the level of retail prices in the UK. Cash flows on all index-linked gilts are linked to the RPI.

Junk Bond

A form of debt investment that carries higher risk because of the likelihood that the issuer will default.

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