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

Clean price

The quoted price of a gilt, which excludes accrued interest

Yield to maturity (YTM)

What is yield to maturity and why is it useful?

Exchange-Traded Fund (ETF)

A collection of investments, pooled into a single fund that can be bought and sold on a stock exchange.

Over-The-Counter (OTC)

A security that is sold outside of an exchange.

Time Value of Money

The concept that money you have now is more valuable than the same sum in the future.

W-8BEN Form

Non-US individuals and businesses may have to file this form for the Internal Revenue Service (IRS), the US tax authority.

Synthetic ETFs

An ETF that that reproduces the return of an index through the use of swaps.

Accounting standards

The rules a company follows when preparing financial statements.

Securities

Bonds and stocks.

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Maturity value