Investing Answers Building and Protecting Your Wealth through Education Publisher of The Next Banks That Could Fail
Investing Answers Building and Protecting Your Wealth through Education Publisher of The Next Banks That Could Fail

Held-to-Maturity Securities

What it is:

Held-to-maturity securities refer to debt securities which an investor holds until maturity.

How it works (Example):

When investors purchase debt securities such as bonds, they have two choices: to hold the security until maturity or to sell it at a premium following a relative decline in interest rates. A debt security is described as held-to-maturity if the holder chooses to hold it for the entirety of its term. For instance, if the holder of a 10-Year Treasury bond chooses to hold it until the maturity date in the tenth year, the Treasury bond qualifies as held-to-maturity.

Why it Matters:

As fixed-income items, held-to-maturity securities are not susceptible to market price fluctuations as returns are locked-in at the time of purchase. In other words, though the market value of the security held may fluctuate, the returns will not since the holder intends to hold the bond until maturity, benefiting from the interest returns.

Related Terms View All
  • Auction Market
    Though most of the trading is done via computer, auction markets can also be operated via...
  • Best Execution
    Let's assume you place an order to buy 100 shares of Company XYZ stock. The current quote...
  • Book-Entry Savings Bond
    Savings bonds are bonds issued by the U.S. government at face values ranging from $50 to...
  • Break-Even Point
    The basic idea behind break-even point is to calculate the point at which revenues begin...
  • Calendar Year
    If Company XYZ starts its fiscal year on January 1 and ends its fiscal year on December...