What is the Maturity date?

The maturity date of a bond is the date on which the issuer of the bond agrees to repay the principal amount borrowed to the bondholder. It marks the end of the bond's term or duration, at which point the issuer is obligated to return the initial investment amount to the bondholder. Additionally, the maturity date signifies the final payment of interest to the bondholder, which is typically paid periodically throughout the bond's term.

Why is the Maturity date important?

For investors, understanding the maturity date is crucial as it helps determine the length of time they will be invested in the bond and when they can expect to receive their principal back. Different bonds have varying maturity dates, ranging from short-term (less than one year) to long-term (over 10 years), influencing the risk and return profile of the investment. Investors often consider the maturity date when assessing their investment goals, risk tolerance, and overall portfolio strategy.