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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

Dirty price

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

NYSE

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Nominal amount

The face value of a gilt. It represents the amount that will be repaid to the holder at maturity and is also used to calculate the dividend or coupon payment.

Fixed Income

An investment that provides a fixed rate of return, often over a specific set of time.

index-linked gilts

Gilts where the dividends and principal repayments are related to movements in the Retail Prices Index (RPI). This is as opposed to a conventional gilt, where the dividends and principal repayments are fixed in nominal terms.

Net Asset Value (NAV)

The value of a company's assets relative to the number of shares it has.

Hypothesis Testing

A mathematical test used to determine whether a claim is true or false.

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