What is Maturity in Finance?

The typical investment has a predefined lifespan. Maturity refers to the date on which the investment terminates. For specifically, maturity is the date on which the principal associated with a debt becomes due for payment. Upon repayment, the instrument is cancelled. The concept is most commonly associated with a bond .

If the issuer of debt does not repay investors on the maturity date , the instrument will be in default , which will have significant negative repercussions for the credit rating of the issuer.