Glossary
Face value
The fixed amount a bond's issuer promises to repay when the bond matures, also called par value or principal.
Updated September 15, 2026
Face value is the fixed amount a bond's issuer promises to repay on the maturity date, the day the loan ends. It is also called par value or principal. A bond's coupon, the interest it pays, is quoted as a percent of face value: a $1,000 bond with a 5 percent coupon pays $50 a year and returns the $1,000 at maturity.
Face value is not what the bond is worth today. Market prices move with interest rates, so a bond can trade above or below face value, and short-term Treasury bills are usually sold for less than face value and pay their face value at maturity and nothing before then. If you sell before maturity, you receive the market price. Repayment also depends on the issuer: a company that defaults can pay less than face value, or nothing.
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How this definition was made
- Written by an AI model (Claude) following Teloria's editorial standard.
- Every factual claim was checked by a separate AI fact-check against official US government and regulator sources.
Official sources consulted
- investor.gov · /introduction-investing/investing-basics/investment-products/bonds-or-fixed-income-products/bonds
- finra.org · /investors/investing/investment-products/bonds
- investor.gov · /introduction-investing/investing-basics/glossary/bonds
- investor.gov · /introduction-investing/investing-basics/glossary/coupon-payment
- sec.gov · /files/ib_corporatebonds.pdf
- investor.gov · /glossary-term-categories/bond
- investor.gov · /introduction-investing/general-resources/news-alerts/alerts-bulletins/investor-bulletins-86
- treasurydirect.gov · /research-center/history-of-marketable-securities/bills/t-bills-faqs/
- investor.gov · /introduction-investing/general-resources/news-alerts/alerts-bulletins/investor-bulletins/what-are