What Is a Maturity Date?
6 Min Read | Published: June 20, 2025
This article contains general information and is not intended to provide information that is specific to American Express products and services. Similar products and services offered by different companies will have different features and you should always read about product details before acquiring any financial product.
Learn what a maturity date is in the context of loans, bonds, and CDs, and what happens with principal and interest when an investment or loan matures.
At-A-Glance
- The maturity date marks the end of a financial agreement on a loan or investment.
- Knowing your loan or investment’s maturity date can help with financial planning since it’s the day when the principal and interest are due.
- On the maturity date of a loan or investment, several things might occur, including loan closure, withdrawal, or reinvestment, depending on the product type and terms.
If you buy a home using a mortgage or purchase a car using an auto loan, you understand that until the loan is paid, you don’t actually own it. Instead, you’ll make regular monthly payments with the understanding that there’s a date years or decades in the future when you’ll pay it off and your house or car will finally be yours.
The financial term for this date is the maturity date. The maturity date marks the end of a financial agreement when a debt’s principal and interest are due. And the term doesn’t only apply to closed-end credit, it also applies to certain investments that accrue interest for a set period, like a certificate of deposit (CD). Understanding a loan or investment’s maturity date is critical for future financial planning. Here’s what you need to know.
How Do Maturity Dates Work for a Loan?
The maturity date on a loan is often a cause for celebration. After months or years of steadily paying on the loan, the maturity date is when it’s finally paid, assuming you’ve made the installment payments on time and in full. On the maturity date, you finally get to take true ownership of the asset. For a homeowner, this can be an occasion 15 or 30 years in the making.
Of course, any modifications to the loan term, missed payments, or overpayments could cause the maturity date to shift. If you’re not sure about your loan’s maturity date, consult your lender.
It’s important to note that some loans could come with a prepayment penalty if you decide to repay the balance due early. That means you’ll want to read the terms and conditions before you do something like pay off your car loan early.
How Do Maturity Dates Work for an Investment?
A maturity date is applicable to various types of investments, including CDs, bonds, and more. When your investment reaches maturity, that means it’s the end of a contractual obligation and may be when the bank makes the final interest payment. With some investments, like a CD, the maturity date is the day on which you receive the principal balance plus interest.
Savings bonds are a different type of investment that is often bought for a fraction of its face value. For example, a Series EE savings bond that you purchase now, is guaranteed by the U.S. government to double in 20 years, so a $100 bond purchased today has the potential to double in 20 years to $200 on the bond’s maturity date.1
On the maturity date for an investment, and ideally, a few weeks before, you’ll need to decide what happens next. You can choose from various paths, from withdrawing the money for a purchase to making another similar investment or even setting the money aside in a savings account.
What Happens at Maturity?
Depending on the type of loan or investment, there are several things that can occur on the maturity date.
- The Loan Account Is Closed
If you’ve met the obligations of the loan and it’s considered paid in full, the lender may close the account on the maturity date. From that day forward, you’ll no longer have an obligation, and the loan account is considered closed. - Renewal
If you fail to repay a loan balance during the loan term, you may be given an option to renew the loan, often with a different rate than the original loan. If interest rates have risen since you took out the original loan, you may have to take on another loan with the newest interest rate. - Reinvestment
With a CD and some other investment products, you may have the option to reinvest the amount for another term. For example, if you took out a one-year CD but decide after a year that you don’t need the money and like the loan terms, you could opt to reinvest into the CD at a new interest rate. - Withdrawal/Redemption
If you decide to remove your money from the investment on the maturity date, you can withdraw or redeem the funds. In this case, the bank may write you a check or offer a direct deposit for the balance, including the principal and interest payments.
Different Types of Maturity Dates
Maturity dates can be broken down into three types: short-term, medium-term, and long-term. These directly correlate to the length of time the loan or investment is open.
- Short-Term
Short-term maturity dates occur in the next one to three years. - Medium-Term
A medium-term maturity date is considered one that’s three to 10 years in the future. - Long-Term
Long-term securities are generally considered those with a maturity date that’s more than 10 years in the future.2
Do Maturity Dates Impact Maturity Values?
Since a maturity date outlines how long a particular investment accrues interest, it inherently determines the value at maturity. For example, you have the potential to earn more on a two-year CD than on a one-year CD, assuming the same interest rate.
Similarly, taking out a 30-year mortgage may cost more than a 15-year mortgage since there are 15 additional years of interest payments before the loan is repaid on the maturity date.
Frequently Asked Questions
A loan that remains unpaid on the maturity date could go into default. In the case of a mortgage, your lender could begin the foreclosure process. It’s important to notify your lender early if you believe your loan may not be paid in full by the maturity date.
The maturity date of a line of credit, like a home equity line of credit (HELOC), is the date on which you need to begin paying back the balance plus interest. A credit card is another line of credit, though it’s considered revolving credit, which has no maturity date.
For many loans, the maturity date and the last payment date are the same. With the last payment, the principal amount and interest payments are paid in full, and the loan is considered to have matured.
The Takeaway
The maturity date is an important factor to understand when you’re debating whether or not to take out a loan or make a particular investment. The maturity date can directly impact how much money you’ll pay or earn over time. If you’re unsure about the maturity date for a particular loan or investment, contact your lender or bank upfront.
1 “EE bonds,” TreasuryDirect
2 “Corporate Bonds,” Investor.gov - U.S. Securities and Exchange Commission
Brooke Joly is a writer on a mission to unravel the mysteries of personal finance and make them accessible to the everyday reader. When she’s not behind the keyboard, you can find her enjoying the outdoors in Charleston, SC.
All Credit Intel content is written by freelance authors and commissioned and paid for by American Express.
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