matured bond
Matured Bond: a bond that has reached the end of its life, where the issuer pays back your original money in full, as agreed from day one.
In plain English
Think of a bond like a fixed deposit you made with the government or a company, except instead of a bank teller, you signed a proper agreement with a start date and an end date written in stone.
That end date is what we call maturity, and when it arrives, the bond has matured. The company or government that borrowed your money now owes you the full amount back, the same way a friend who borrowed ₦500,000 from you three years ago finally shows up with your money on the agreed day.
Say you bought a Federal Government of Nigeria bond worth ₦1,000,000 with a five year tenor. For those five years, you were collecting interest calmly every six months, like clockwork. On the day it matures, the government pays you the ₦1,000,000 principal back in full, on top of all the interest you already collected.
In the United Kingdom, someone might hold a Gilt, which is the British version of a government bond, and the same thing happens. It matures, the government hands back the principal, and that particular chapter closes.
For Nigerians abroad sending money home to invest in bonds through a local stockbroker, maturity is the day the whole plan comes full circle. The money you sent from London or Lagos years ago, now grown with interest, lands back in the account, ready to be reinvested, spent, or moved elsewhere.
A matured bond is not a mystery or a trick. It is simply a promise that has been kept, on the date it was always going to be kept.
You invest ₦2,000,000 in a three year corporate bond paying 12% yearly interest. Each year you collect ₦240,000 in interest. On the third year, the bond matures, and the company pays you back your ₦2,000,000 principal along with the final interest payment, closing out the investment completely.
Questions people ask
What happens if I don't collect my money when a bond matures?
The money is usually still owed to you and sits with the registrar or your stockbroker, but it may stop earning further interest, so it is worth claiming it promptly rather than leaving it idle.
Can I sell a bond before it matures?
Yes, most bonds can be sold on the secondary market before maturity, though the price you get may be higher or lower than what you originally paid, depending on interest rates at the time.
Is a matured bond the same as a bond that has defaulted?
No, a matured bond simply reached its natural end date and was paid as agreed, while a defaulted bond is one where the issuer failed to pay back what was owed, which is a completely different and unhappy story.
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