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Held-To-Maturity Security

Categories: Trading, Regulations

It's a bond. Usually, anyway. It's a debt security you bought when you were...wee. It cost a grand and was issued by The Royal Bank of Party Tricks, fine makers of magic shoppe and party favors. That grand was all of the parsnip-picking money you'd earned for the summer, and the bond agreed to pay 7% interest for 20 years, at which time it would return that grand or principal.

Like a loyal old dog, you held it all 20 years, as it dutifully paid you $35 twice a year, until it matured some 2 decades later. Only 2 more decades, and you should be close to maturing yourself (might be time to give up the party magic).

Find other enlightening terms in Shmoop Finance Genius Bar(f)