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

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.

Bed & ISA

Understand what Bed and ISA is and how it works

Diversification

An investment strategy in which money is put into a variety assets.

Unit Trusts

A collective investment scheme the investors pay money into in exchange for units. The money is invested in a diversified portfolio of assets.

Internal Rate of Return (IRR)

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

Over-The-Counter (OTC)

A security that is sold outside of an exchange.

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

Xetra

A trading venue operated by the Frankfurt Stock Exchange.

Custodian bank

Learn what a custodian bank is.

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Maturity value