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

Inflation

The increase in the prices of goods and services over time, and the process by which money loses its value.

Arithmetic Mean

The sum of a set of numbers added together and then divided by the total amount of numbers in that set.

Time-Weighted Rate of Return (TWRR)

A return calculated over the time period invested, that excludes extraneous elements, such as deposits to and withdrawals from the investment accounted.

UK Treasury bill

A debt instrument issued by the UK government with a maturity of less than one year.

S&P 500

Find out what is the definition of the S&P 500 index.

Investment Return

The amount of money made or lost from an investment. Usually expressed as a percentage.

Geometric Mean Return

A way of calculating compound returns on an investment or savings over a set period of time.

Hedge Fund

Investment funds that are often associated with riskier and shorter-term trading strategies.

Equity ETF

An exchange-traded fund that is comprised of a set of stocks.

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Maturity value