In fixed income, maturity is the date on which the issuer repays the bond's principal to the holder. The term also describes the length of time until that date, which is often categorized as short (roughly up to 3 years), intermediate (about 4-10 years), or long (more than 10 years).
Maturity helps investors compare securities by time horizons and risk. It influences how a bond's price responds to interest-rate changes: generally, longer maturities show greater price sensitivity, while shorter maturities tend to be less volatile. The maturity date is fixed at issuance and does not change with market moves. When evaluating a bond, investors also consider the coupon rate and yield, which interact with maturity to determine total expected return if held to maturity.
Maturity is one of several key terms in bond investing. It is distinct from yield to maturity (the total return if the bond is held to maturity) and duration (a measure of price sensitivity). Par value is the amount repaid at maturity. Short-, intermediate-, and long-term maturities reflect different risk and return profiles, especially for interest-rate risk and reinvestment risk.
Example: A bond issued with a 5-year maturity will repay its par value at the end of year five.
Maturity date · Term · Coupon (bond) · Yield to maturity · Duration (bond) · Par value · Interest-rate risk