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Maturity is defined as the date on which the principal balance of a loan, mortgage, bond, or other financial instrument becomes due and payable.

Maturity Explained

For marketable securities, the date when the security becomes payable and stops earning interest.

With loans, maturity is the final payment due date on a loan at which point the principal is due to be paid. Most loans have a fixed maturity date which is a specific date.

With savings bonds, the security reaches maturity when its term expires. The security is worth its face value when it matures. However, sometimes market conditions can make the security worth its full face value before its term even expires. Also, savings bonds have an “original maturity” period during which the bond increases in value and becomes worth at least its face amount and an “extended maturity period” during which it continues to earn interest. After Treasury securities fully mature, you do not get any more extra money (interest) if you keep the securities.

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