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Maturity Date
Definition
The maturity date is the date when a loan, bond, or investment becomes due and the principal must be repaid in full.
Explanation
For bonds, the maturity date is when the issuer repays the face value to the bondholder. Bond maturities range from short-term (under 3 years) to long-term (10+ years). Longer maturities typically offer higher yields to compensate for increased risk.
For loans, the maturity date is when the final payment is due. Understanding maturity dates is essential for planning cash flows and reinvestment strategies.
Example
A 10-year bond purchased in January 2025 matures in January 2035. At maturity, the issuer repays the $1,000 face value to the investor.