Maturity

Maturity is the date on which a bond's issuer repays the face value (principal) to the bondholder. It defines the time horizon of the investment and determines where a security sits on the yield curve.

U.S. Treasury securities are categorized by their original maturity at issuance:

• Bills: 4-week, 8-week, 13-week, 17-week, 26-week, and 52-week (sold at a discount, no coupons)
• Notes: 2-year, 3-year, 5-year, 7-year, and 10-year (semiannual coupons)
• Bonds: 20-year and 30-year (semiannual coupons)

Maturity is related to but distinct from duration. Maturity is a fixed date; duration measures price sensitivity to interest rate changes and depends on coupon rate, yield, and payment frequency. A 30-year zero-coupon bond has a duration equal to its maturity (30 years), but a 30-year coupon bond has a duration of roughly 16-17 years because the intermediate coupon payments reduce the effective time to receive cash flows.

The yield curve plots yields against maturity, with the convention that "the 10-year" refers to the most recently issued 10-year note (the on-the-run issue). As time passes and the bond ages, its remaining maturity shortens, and it rolls down the curve.