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In finance, maturity or maturity date is the date on which the final payment is due on a
loan In finance Finance is the study of financial institutions, financial markets and how they operate within the financial system. It is concerned with the creation and management of money and investments. Savers and investors have money avai ...
or other
financial instrument Financial instruments are monetary contracts A contract is a legally binding document between at least two parties that defines and governs the rights and duties of the parties to an agreement. A contract is legally enforceable because it me ...
, such as a
bond Bond or bonds may refer to: Common meanings * Bond (finance) In finance Finance is the study of financial institutions, financial markets and how they operate within the financial system. It is concerned with the creation and management of ...
or
term deposit A time deposit or term deposit (in the United States The United States of America (U.S.A. or USA), commonly known as the United States (U.S. or US) or America, is a country Continental United States, primarily located in North America. I ...
, at which point the
principal Principal may refer to: Title or rank * Principal (academia) The principal is the chief executive and the chief academic officer of a university A university ( la, universitas, 'a whole') is an educational institution, institution of higher ...

principal
(and all remaining
interest In finance Finance is the study of financial institutions, financial markets and how they operate within the financial system. It is concerned with the creation and management of money and investments. Savers and investors have money availa ...

interest
) is due to be paid. Most instruments have a ''fixed maturity date'' which is a specific date on which the instrument matures. Such instruments include fixed interest and variable rate loans or debt instruments, however called, and other forms of security such as redeemable preference shares, provided their terms of issue specify a maturity date. It is similar in meaning to "redemption date". Some instruments have ''no fixed maturity date'' which continue indefinitely (unless repayment is agreed between the borrower and the lenders at some point) and may be known as "perpetual stocks". Some instruments have a range of possible maturity dates, and such stocks can usually be repaid at any time within that range, as chosen by the borrower. A ''serial maturity'' is when bonds are all issued at the same time but are divided into different classes with different, staggered redemption dates. In the financial press, the term "maturity" is sometimes used as shorthand for the security itself, for example, ''In the market today the yields on ten-year maturities increased'' means the prices of bonds due to mature in ten years fell, and thus the redemption yield on those bonds increased.


See also

* Deferred financing cost *
Rolling (finance) Rolling a contract is an investment concept meaning trading out of a standard contract and then buying the contract with next longest maturity (finance), maturity, so as to maintain a position with constant maturity. Motivation One may roll a contr ...
*
Maturity transformationMaturity transformation is the practice by financial institutions of borrowing money on shorter timeframes than they lend money out. Financial markets also have the effect of maturity transformation whereby investors such as shareholders and bondhold ...


References

Loans Swaps (finance) Bond valuation {{finance-stub