When a fixed-income investment matures, and you get your investment amount back, the repayment is known as redemption.
Bonds are usually redeemed at par, or face value, traditionally $1,000 per bond. However, if a bond issuer calls the bond, or pays it off before maturity, you may be paid a premium, or a certain dollar amount over par, to compensate you for lost interest.
You can redeem, or liquidate, open-end mutual fund shares at any time. The fund buys them back at their net asset value (NAV), which is the dollar value of one share in the fund.
- Browse Related Terms: Callable bond, Conversion price, Convertible bond, Deep discount bond, Exchange traded notes, Gilt-edged security, Indenture, Noncallable, Original issue discount, Par Value, Prerefunding, Redemption, Sinking fund, Zero-coupon bond, Zero-coupon convertible bond
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