To resolve the dilemma, permanent insurance policies are typically structured as «endowment» policies that are meant to
mature at the face value of the policy at an advanced age — e.g., age 100.
Investors pay more than face value to get those higher rates, but premium bonds will eventually
mature at face value, resulting in a capital loss.
Instead, you buy it at a discount and
it matures at face value.
A bond which pays no coupons, is sold at a deep discount to its face value, and
matures at its face value.
Not exact matches
Despite their high real yields, the premiums over
face value would erode in the event of deflation (though the securities do not
mature at less than par in any event).
Say you buy a bond that currently costs $ 950, and
matures in one year,
at $ 1000
face value.
If a bond has a
face value of $ 100, pays 1 % and
matures in 20 years» time then you expect to receive a total of $ 120 from buying it now — $ 1 per year for 20 years and $ 100
at the end.
Series EE savings bonds are different in that they are issued
at a deep discount from
face value and pay no annual interest because it accumulates within the bond itself, and the interest is paid out when the bond
matures.
Agency Discount Notes Like Treasury Bills, Agency Discount Notes are sold
at a discount and
mature to
face value in short - term intervals.
The index measures the performance of US dollar - denominated, investment - grade, corporate bond securities publicly issued by non financial companies that have $ 250 million or more of outstanding
face value at the time of inclusion and
mature between March 31, 2015 and April 1, 2016.
Instead, investors buy zero coupon bonds
at a deep discount from their
face value, which is the amount a bond will be worth when it «
matures» or comes due.
Typically issued and redeemed
at face value, these notes and bonds pay out a fixed rate of interest every six months until they
mature.
In return for the loan of your funds, the issuer agrees to pay you interest and ultimately to return the
face value (principal) when the bond
matures or is called,
at a specified date in the future known as the «maturity date» or «call date.»