Investing term
What is Face value?
The amount the bond issuer promises to repay at maturity. Also called par value.
Face value (or par value) is the amount a bond issuer promises to repay the holder at maturity, and the figure the coupon percentage is calculated on. Most bonds have a face value of $1,000, and it stays fixed for the life of the bond regardless of what happens in the market.
A bond's market price, by contrast, moves around: it can trade above face value (at a premium) or below it (at a discount) as interest rates change. But at maturity, the holder receives exactly the face value back — no more, no less — assuming the issuer doesn't default. That fixed endpoint is what makes a held-to-maturity bond so predictable, whatever its price does in between.
A bond can trade below its $1,000 face value today, but its price drifts back to par as maturity nears — and the holder is repaid exactly $1,000, whatever the price did in between.
For example
A bond with a $1,000 face value might trade at $950 today, but the holder still collects the full $1,000 when it matures.
Learn it by doing
That's Face value in theory — it clicks when you use it. Practise it hands-on in a free, interactive lesson (Stage 4, Stocks, Bonds, Cash & Alternatives).
Try the free lesson →Why it matters to you
Face value matters because it's the anchor that makes a bond predictable: it's both the size of the eventual repayment and the base the coupon is figured on. The gap between a bond's market price and its face value is what turns into extra return (for a discount bond) or a drag (for a premium bond) as it drifts back toward par at maturity. Knowing the face value lets you see past the fluctuating price to the fixed promise underneath.
⚠ Confusing market price with face value
A bond quoted at $950 hasn't 'lost' $50 of its repayment — it still redeems at its $1,000 face value at maturity. The market price reflects current interest rates; the face value is the fixed amount you get back. Mixing up the two leads to misreading a discount as a loss or a premium as a gain.