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Maturity definition
Maturity is the date when a financial instrument reaches the end of its agreed term and the principal falls due. It applies to bonds, loans, certificates of deposit, bills, and other debt instruments.
At maturity, the issuer or borrower repays the principal to the lender or investor. In fixed-income products, maturity also marks the point where scheduled interest payments stop, so the holder receives the final coupon and the face value together.
Maturity is not the same as duration. Maturity is a fixed calendar date, while duration measures how sensitive a bond's price is to interest rate changes. A shorter maturity returns capital sooner; a longer maturity keeps it committed for longer and tends to react more to rate moves.
Maturity Example
You buy a 10-year bond with a face value of USD 10,000. The bond reaches maturity 10 years from issue.
On the maturity date, the issuer repays the principal:
USD 10,000
If a final interest payment is due, you receive it at the same time as the principal.
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