What is the maturity value?
The maturity value is the value of the fixed period at the end of the term when the security is said to be "mature". When the safety holder applies mature security, he / she receives the maturity value in cash or other form of compensation by agreement. There are a number of ways to determine this value, depending on the type of security.
A common example of security of the fixed period is the binding. For bonds, the maturity value is also known as the nominal value, which is the amount in which the bond is issued. People who invest in bonds buy them when they are released, receive interest payments at specified intervals throughout the life of a bond and can apply them at the end of the term for their nominal value. Some investors decide to sell their bonds or are forced because they need liquidity and cannot have funds locked in investment for a fixed period.
Certificates of deportation (CD) are another example of a fixed time investment with maturity. In the case of CD, the maturity value is determined by how much money is stored in the CD and how much interest is increasing. Because the interest is intensified by adding to the initial balance, the CD earns more money every year. Calculators are available online that people can use to find the value of CD maturity. These tools usually assume that people do not run out of money soon. Early resignation results in a sanction and also reduces the amount of interest because the CD has less money in it.
Energy -saving bonds, some types of annuit and other fixed investments have a maturity value. When people buy investments, they are provided with a statement of estimated maturity or with information that can be used to calculate them. For example, when a person buys a CD, he is given a locked interest rate that we can find the maturity value.
such investments have advantages becauseThey create constant payback rates and have very predictable maturity values. This can be calming for conservative investors. However, they are also very disliked. This can be a problem for people who need cash. Although these investments can be sold or divided early, people will pay fines. It is advisable to consider whether the funds needed before the maturity date may be invested.