What Is Bond Maturity?
What is Bond Maturity? When buying bonds, there will always be what is referred to as bond maturity. Bond maturity is the date at which a given bond contract will end. At this time the bond issuer is required to make full and complete payment of the bond
value. The bond value, the amount paid at the bond maturity date, is the face amount of the bond itself. The bond maturity amount does not refer to interest payment amounts or any other aspect of the bond’s value, simply the amount the original bond was issued for. When buying bonds it is important to note that one will only pay the face value of the bond if it has not been previously issued to another investor. In this state the bond has zero days towards its maturity date accumulated and therefore will not be offered either at discount other price.
Buying Bonds: Bond Investment Information
Buying bonds is not something new in the world of investment. Bonds have existed in some form or another since the early 1900’s. The most common bonds are government issued bonds. These bonds typically have very long bond maturity dates, sometimes as long as twenty years or more. A bond value is measured in more ways than simply its face value. The face value of a bond is the original amount lent by the investor to the bond issuer. The bond issuer can be the federal government, a local government, a government entity such as a public works project, or even a non-governmental corporation. The inherent traits that make a bond a bond however are always the same. When buying bonds, familiarize yourself with these terms prior to investing:
Face Bond Value: face value of a given bond at its issuance
Coupon Amount: also referred to as the interest, this is the amount paid to the bond owner over the life of the bond in addition to the bond value
Bond Maturity: date at which a given bond will complete its lending cycle and the issuer is to make payment
Related posts:- What Is A Treasury Bond?
- What Are Bonds Investments?
- What Are Convertible Bonds?
- What Is A Municipal Bond?
- What Is The Interest Rate On A Bond?
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