Maturity

Source: Encyclopedia of Banking & Finance (9h Edition) by Charles J Woelfel
(We recommend this as work of authority and you can order it here)

The terminating or due date of a note, time draft, acceptance, bill of exchange, bond etc; the date a time instrument of indebtedness becomes due and payable, e.g., a 60-day note become due and payable at the expiration of that period.  A check or sight or demand instrument matures upon presentation for payment.

Time drafts or bills of exchange drawn 30 days after sight mature 30 days after acceptance, the maturity being fixed by computing the date 30 days thereafter.  Time drafts should therefore be presented for acceptance as soon as possible whenever it is desirable to bring the maturity at the earliest possible date.

As to maturity, bonds may be classified in four groups:  (1) obligatory maturity without provision for PRIOR REDEMPTION, (2) obligatory maturity with prior redeemability with or without a premium, (3) indeterminate maturity, i.e., no definite maturity indicated but redeemable after a certain date at the option of the issuer, and (4) perpetual bonds issued without provision for optional or obligatory maturity, except in case of default in interest payments.  Some common stocks of the classified type, such as Class A, and preferred stocks generally are issued subject to redemption, in whole or in part, and usually at a premium.  

Back to Information