Maturity Date

Every bond has a maturity date. On that date, the issuer repays the face value to bondholders, and the bond stops paying interest. A ten-year bond issued in 2026 might mature in 2036.

The time remaining until maturity strongly affects a bond's behaviour. Bonds with longer maturities usually pay higher interest, because investors want compensation for tying up money longer and for greater uncertainty. They are also more sensitive to interest rate changes: their prices move more when rates rise or fall.

Some bonds can be repaid before their maturity date. A callable bond allows the issuer to repay early, often when interest rates have fallen. A puttable bond allows the investor to demand early repayment.

The term is also used for other contracts. A certificate of deposit matures when the deposit term ends, and a loan matures when the final payment is due. In derivatives, the date a contract ends is usually called the expiration date, although maturity date is sometimes used for contracts such as futures and swaps.