Redemption

Getting the face value back on the maturity date

In detail

Redemption is the issuer paying back the face value on the maturity date. That day is the redemption date, and the time left until then is the remaining term. The longer the remaining term, the more the price swings when interest rates move. Hold to maturity and the face value comes back, as long as the issuer can pay.

Example

Buy a ten-year bond in 2026 that redeems in 2036, and the remaining term is 10 years.

Related terms

Bond Face value Duration

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For learning, not investment advice. Decisions are your own.