Glossary · Bonds and rates
Maturity
A bond’s maturity is the date the borrower pays back the face value and the bond ends; also, how long is left until then.
Also called: maturity date, term, tenor, time to maturity
Yield a year, November 10, 2026.
November 10, 2026.
November 10, 2026.
In plain words
When you lend a friend money, you agree on when they pay it back: next week, next month, next year. For a bond, that date is its maturity. On it, the borrower repays the face value (say $1,000), makes the last interest payment, and the bond stops existing.
Bonds come in every length. The US government borrows for as little as a few weeks with Treasury bills and for as long as 30 years with Treasury bonds. Companies sell bonds of 5, 10 or 30 years; a few have even sold 100-year bonds.
Longer usually pays more: lenders want extra for tying their money up and for the risk that rates or inflation change on the way. Since 1990, the 10-year Treasury yield has been above the 3-month one on 88% of days.
Example
One borrower, three maturities
What the US government pays to borrow for different lengths of time, and what each bond risks if rates then rise by 1 point.
- A 2-year Treasury pays 4.73% a year (November 10, 2026).
- A 10-year Treasury pays 4.98%.
- A 30-year Treasury pays 5.35%.
- If rates then rise by 1 point, a new 2-year note loses only about 1.9% of its price, while a new 30-year bond loses about 13.3%.
A longer maturity usually brings a little more yield and a lot more price risk.
One level deeper
Treasuries are named by their maturity when sold: bills run up to a year, notes 2 to 10 years, bonds 20 or 30 years. In the market only the time left matters. A 10-year note sold 7 years ago now behaves like a 3-year note.
Maturity drives risk. A short bond returns your money soon, so a rise in rates hurts it little; a long one locks in its coupon for decades, and its price swings much more. The precise measure is duration.
Some bonds can end early: a callable bond lets the borrower repay before maturity, usually after rates have fallen. A few have no maturity at all: Britain’s perpetual consols, a kind first sold in the 1750s, paid interest until the government repaid the last of them in 2015.
Average Treasury yield by maturity since 1990
Each bar is the average yield of US government debt of one maturity over the business days since 1990. Longer loans paid more on average, though on some days the order flipped (an inverted yield curve).
The numbers behind the chart
| Average yield since 1990 | |
|---|---|
| 3 months | 2.93% |
| 6 months | 3.04% |
| 1 year | 3.12% |
| 2 years | 3.34% |
| 3 years | 3.49% |
| 5 years | 3.80% |
| 7 years | 4.06% |
| 10 years | 4.26% |
| 30 years | 4.74% |
Why it matters
Maturity is the first thing to check on any bond: it tells you when you get your money back and how far the price can swing before then.
Matching maturities to plans (money for a house in 3 years, retirement in 20) is the simplest way to avoid selling a bond at a bad moment.
Governments watch when their debt matures: if a lot comes due at once, they must borrow again at whatever rates the market then demands.
A common mistake
Myth: A 10-year bond is always a 10-year bond.
In fact: Only on the day it is sold. A 10-year bond issued 8 years ago has 2 years left and behaves like a 2-year bond: its price barely moves when rates change.
Questions people ask
What happens when a bond matures?
The borrower pays the face value and the last coupon, and the bond ends. If you hold Treasuries at a broker, the cash simply lands in your account.
Can I sell a bond before it matures?
Yes, most bonds trade every day. But the price may be above or below what you paid, depending on how yields have moved since.
What is the longest bond maturity?
The US Treasury sells bonds of up to 30 years. Some companies and governments have sold 50- and 100-year bonds, and a few bonds, like Britain’s old consols, had no maturity at all.
Read more on BigCapital
About the numbers
- The numbers on this page are recalculated from the data every night; the sources are listed at the end of the page.
- US Treasury par yield curve rates: U.S. Department of the Treasury, Daily Treasury Par Yield Curve Rates (Interest Rate Statistics).
- This page explains a term. It is not investment advice.