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Maturity

Maturity is the date on which a debt instrument, such as a bond, comes due and the issuer must repay the principal to the holder, or the remaining time until that date.

What Is Maturity?

In finance, maturity is the date when a debt instrument comes due, meaning the borrower must repay the amount originally borrowed. The term can also describe how much time remains until that date, which is often called time to maturity. Bonds, certificates of deposit, and other fixed-income security types all have a stated maturity, which is set in the contract when the security is issued.

How Maturity Works

Many debt instruments pay interest periodically during their life and then return the principal on the maturity date. For a standard bond, the investor receives the final coupon payment along with the face value at maturity, after which the bond ends. Maturities are commonly grouped into short-term, intermediate-term, and long-term categories. Longer maturities generally expose a bond's price to more change when interest rates move, so investors often compare maturities when assessing interest rate risk.

Maturity is also a key input for yield to maturity, which estimates the total annual return if a bond is held until it matures and all coupons are reinvested at the same rate.

An Example

Suppose a bond with a $1,000 face value and a ten-year maturity is issued today. It pays a fixed coupon each year, and on the maturity date the issuer repays the $1,000 principal. An investor who buys at issue and holds until maturity receives those scheduled payments. An investor who sells earlier receives whatever the market price is at that time, which may be more or less than the face value.

Maturity in Other Markets

Not every security has a maturity. Stocks have no set end date, and mutual funds generally do not either. Options and futures contracts use a similar concept called an expiration date, when the contract ends or settles.

Why It Matters to Investors

Maturity shows when an investor can expect to recover principal and how long money may be committed. It is one of several factors to consider alongside credit quality and duration, which measures a bond's sensitivity to interest rate changes.

Updated October 16, 2026. For general education only; not financial, tax or legal advice.

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Related Terms

Fixed-Income Security

A fixed-income security is an investment, such as a bond, that promises to pay the investor a set schedule of interest and to return principal at a specified time.

Interest Rate Risk

Interest rate risk is the chance that changes in market interest rates will reduce the value of an investment, most often bonds and other fixed-income securities.

Yield to Maturity (YTM)

Yield to maturity is the annualized total return an investor earns from a bond if it is held until maturity and all coupon payments are reinvested at the same yield.

Duration

Duration is a measure, expressed in years, of how sensitive a bond's price is to changes in interest rates, and of the weighted average time until its cash flows are received.

Bond

A bond is a loan that an investor makes to a borrower, such as a government or company, in exchange for regular interest payments and the return of the principal at a set maturity date.

Principal

Principal is the original sum of money borrowed in a loan or invested in a financial product, not counting any interest, or the amount on which interest is calculated.

Certificate of Deposit (CD)

A certificate of deposit is a savings product in which a bank holds a fixed sum for an agreed term, paying interest and returning principal at maturity, with early withdrawal usually penalized.

Expiration Date

The expiration date is the last day on which a derivative contract, such as an option or futures contract, remains valid and can be exercised, after which it becomes void.