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

American Depository Receipts (ADRs)

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

Value stocks

Stocks in companies that aren’t necessarily growing fast, but instead are dependable and stable.

Value Investing

The art of buying shares which trade below their value, according to the analysis of the value investor.

Money laundering

A method of moving money obtained illicitly through the financial system so it can be used legally.

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.

Global Investment Performance Standards (GIPS)

A set of standards which investors use to present their investment results.

Net asset value

Mutual funds and investment trusts are priced on their net asset value (NAV).

OEIC

Unique to the UK, these funds pool together money to invest from multiple investors.

Inflation

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

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Maturity value