/

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.

‍

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

‍

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

‍

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

Compound interest

Understand what compound interest means and how it's calculated

UK Treasury bill

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

Interest Rate

The amount a lender charges for lending your money, or a borrower pays you for borrowing your money.

LSE

London Stock Exchange, which was founded in 1571 and now has a market cap of almost $5 trillion.

Coupon

Also called a dividend, this is the fixed annual interest paid to gilt holders. It’s usually paid in two equal, semi-annual instalments and expressed as a percentage of the nominal value of the gilt.

Know Your Customer (KYC)

A legal requirement for financial firms to understand exactly who their customers are. Used to prevent money laundering and terrorist financing.

Xetra

A trading venue operated by the Frankfurt Stock Exchange.

Holding Period Return

The amount of money generated by an asset during the time that it was held by an investor..

Forward pricing

Mutual funds are traded on a forward pricing basis, meaning the price you see will be different to the price you may trade at.

You’re just minutes away from commission-free investing

When you invest, your capital is at risk

Freetrade does not provide investment advice and individual investors should make their own decisions or seek professional advice. The value of investments can go down as well as up and you may receive back less than your original investment. Freetrade is a trading name of Freetrade Limited, which is a member firm of the London Stock Exchange and is authorised and regulated by the Financial Conduct Authority. Registered in England and Wales (no. 09797821).

© 2025 Freetrade, All rights reserved. The Apple logo is a trademark of Apple Inc. App Store is a service mark of Apple Inc. Google Play and the Google Play logo are trademarks of Google LLC.