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In the world of business and finance, maturity stands for the last payment date of either a loan or some other form of financial instrument. It is also known as the maturity date. On this maturity date, both the outstanding principal and any remaining associated interest are owed and expected to be rendered for final payment. If they are not paid on the maturity date, such loans or instruments are considered to be in default.

A fixed maturity pertains to a kind of financial instrument where the loan will have to be paid back on a pre set date. Included in fixed maturity instruments are variable rate loans and fixed interest rate loans or other kinds of debt instruments. Besides these, redeemable preferred shares of company stocks fall under this category of fixed maturity instruments. The key to fixed maturities is that they must have a particular maturity date spelled out in their terms. This maturity date is much like a redemption date.

Other instruments do not come with a set fixed maturity date. These kinds of loans go on indefinitely, until the point that a lender and borrower get together and agree on the loan being paid down. These instruments and loans are sometimes referred to as perpetual stocks. Other financial instruments may include a range of potential dates of maturity. These types of stocks may be repaid at any time that suits the borrower, so long as it is within the time range that is provided to them.

Another form of maturity is the serial maturity. Serial maturities mostly pertain to bonds that companies issue to borrow money for a variety of purposes, including expansion into new markets or developing and marketing new products. With serial maturities, all of the bonds are actually issued at one time. Their classes describe the various redemption dates on them, which are generally staggered away from each other.

Maturity is also used by financial news media to discuss securities that have maturities, such as bonds themselves. This abbreviation for these kinds of investments is commonplace. They might claim that the yields declined on twenty year maturities. This would mean that bond prices which are due to reach full maturity in twenty years rose while their actual yields fell, since bond prices move inversely to the direction of their associated yields.

All types of bonds may be referred to using this short hand form of calling them maturities. This could include corporate bonds, Federal Treasury bonds, and also local government municipal bonds. All of these bonds have specific dates of maturity on which they will repay their principal. Preferred stocks also could be thought of as maturities, since they similarly possess set dates on which they are redeemed. They are not commonly referred to by this abbreviation though.

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