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

Packaged Retail and Insurance-based Investment Product (PRIIP)

An investment where, regardless of its legal form, the amount repayable to the retail investor is subject to fluctuations.

Inflation

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

Spot Rate

The currency exchange rate a bank quotes, valid with immediate effect.

SPAC

Find our what a SPAc or special purpose acquisition company is.

Bull market

We explain what a 'bull market' means

Stock Exchange

A physical/digital place where stockbrokers and traders can buy and sell securities.

Prospectus

The official document a company publishes before selling shares to the public. Long, detailed, and worth a read.

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.

Retail Prices Index (RPI)

An index published each month by the Office for National Statistics, which measures the level of retail prices in the UK. Cash flows on all index-linked gilts are linked to the RPI.

Maturity value