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What Does Account Maturity Mean?

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When discussing finances, you may have wondered, “What does account maturity mean?” You can think of account maturity as the lifespan of a financial instrument or agreement. More often than not, the discussion is actually about maturity dates.

Learn more about financial maturity and how it affects your accounts and loans.

Maturity Date Definition

A financial maturity date is when a transaction (like a loan) or financial instrument (like a bond) ends. Of course, depending on the situation, the transaction or instrument will either be renewed or disappear due to being paid in full.Man trying to learn about financing

There are three types of maturity timelines:

  • Short-term: A timeline of three to five years
  • Medium-term or intermediate-term: A timeline of four to ten years
  • Long-term: A timeline of 10 years or more

Why Is a Maturity Date Important?

A maturity date helps establish a timeline for how long it will take for a loan or investment to be paid off or to gain a certain amount of positive interest. It helps consumers plan for the future by showing how much an account will grow due to interest rates by its maturity date. It also shows a lendee how many payments are needed to pay the loan in full.

Maturity dates help with risk management—a common reason people get rejected for a “traditional” loan. A maturity date lets investors or lenders decide how to manage the risk (credit, interest rate, or refinancing) if something prevents the agreement from coming to term—think bankruptcy, lack of payments, etc.

Maturity Value

When discussing “what does account maturity mean” or maturity dates, maturity value also comes up. Maturity value is the money an investor or lender gets when the financial instrument matures (reaches the maturity date) due to interest. It’s basically the principal (the original amount) + extra money due to interest.

How Maturity Affects Different Monetary Accounts

Maturity means something different depending on the financial account or deal you’re in, so here’s a breakdown of how maturity affects common monetary accounts or loans.

Personal Loans

Personal loans, or installment loans, have maturity dates that work as the due date for the loan to be paid in full. However, the maturity date can change depending on term agreements.

The maturity of this loan shows the day the loan is meant to be paid in full and the monthly payments needed to meet the maturity date.

This also works with car loans, which are a form of personal loan. The car will be entirely yours once the loan reaches maturity and is paid off.

Payday Loans

Maturity works similarly with payday loans, though the maturity date will be shorter than that of a personal loan. Payday loans are a quick fix for people in challenging financial situations.


While technically a type of personal loan, mortgages are distinguished from other types due to their maturity dates. Mortgages tend to last a long time, and the maturity date can be 15 to 30 years after the loan is signed.


With bonds, the maturity date means that once a bond reaches a specific date, it will no longer collect interest. Think of a bond as a loan and the maturity date as the date when the loan is paid in full, including interest. Bonds slowly gain interest over a time period, and the maturity date means the bond payments have reached the full value of the bond.

Bonds can have a variety of maturities depending on the type of bond.


Certificates of deposit (CDs) are like bonds, except CDs are backed by the Federal Deposit Insurance Corporation (FDIC). A maturity date sets the timeline for collecting interest on a CD, and the interest stops at the maturity date, though many CDs roll over into a new term with a new maturity after a short period, like 10 days.

You can also face fees when you take money out before a CD fully matures.

Account Maturity/Maturity Date FAQs


In finances, maturity works by setting a timeline for a loan or investment for payment or interest collected. It acts as an ending for a financial agreement.


Two things can happen when a loan matures and isn’t paid off. One, a new agreement is made involving a payment extension. Two, the loan defaults, and the lender can sue you for the rest of the money.


After the maturity date, either your loan is due to be paid in full or an investment no longer collects interest. Some investments will roll over into a new term with a new maturity date.


Whether or not unpaid loans ever go away depends on various factors, including:

  • The type of loan you have
  • The lender
  • The state you live in

If you don’t pay off a loan, you may notice a hit in your credit card score or potentially be sued by the lender.

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