Maturity
The date on which a bond's principal must be fully repaid to the bondholder, ending the life of the debt instrument.
Maturity is the final date of a bond's life — when the issuer returns the face value to the holder and coupon payments cease. Maturity determines where a bond sits on the yield curve and is the primary driver of its duration and price sensitivity to rate changes.
Bonds are categorized by maturity: short-term (under 2 years), medium-term (2–10 years), and long-term (10+ years). Longer maturity means higher duration risk — more price volatility for a given yield change — but typically higher yield as compensation (positive term premium).
Callable bonds give the issuer the right to redeem before maturity if rates fall — shortening the effective maturity for investors and making yield-to-call calculations relevant alongside YTM.
Related Terms
Bond
A debt instrument in which the issuer borrows money from the buyer and promises to pay periodic interest plus return the principal at maturity.
BeginnerCallable Bond
A bond the issuer can redeem early at a set call price, usually after rates fall — capping the holder's upside and adding reinvestment risk.
IntermediateCoupon
The fixed annual interest payment made by a bond issuer to the bondholder, expressed as a percentage of face value.
BeginnerDuration
A measure of a bond's sensitivity to interest rate changes — the approximate percentage price change for a 1% move in yield.
AdvancedFace Value (Par)
The nominal value of a bond that the issuer promises to repay at maturity — typically $1,000 for U.S. bonds.
BeginnerYield to Maturity
The total annualized return an investor earns if they hold a bond to maturity — accounting for coupon payments, price paid, and time remaining.
Intermediate