In general, maturity means adulthood
, whether in animals or fruit
. Maturity, the end result of the process of maturing
. Among humans it is applied not only to the physical state of not growing any more, but also to one's psychological
development - someone may be an adult but be called immature if they act childish, or a well-behaved teenager may be praised for their maturity.
Maturity has a special meaning in regards to Fixed Income instruments - a fixed income product matures when it reaches the end of its schedule of interest payments and pays back the principal to the investor.
A fixed income instrument is a particular kind financial product - bonds and debentures are the most common examples. Bonds work like this: The investor pays a certain sum of money, called the principal, at the outset. The issuer, the company who issues the bond, agrees to pay regular interest on that principal (Usually interest is paid twice a year) to the investor for a certain length of time. At the end of that period of time, the issuer pays back the principal in full to the investor. The date that the principal has to be paid back is the maturity date. When the principal is paid back, the bond is said to have matured.
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