A term bond refers to a bond that matures on a single, specific date in the future. At the time, the bond’s face value (i.e., the principal amount) must be repaid to the bondholder. The term of the bond is the amount of time between the bond’s issuance and its maturity.

What is the difference between a serial bond and a term bond?

Term bonds are bonds which mature or come due on a single date. Serial bonds are bonds which do not mature or come due on a single date. Instead, serial bonds have maturity dates which are staggered over several or many years.

How does a long-term bond work?

Long-term Treasury bonds are U.S. government bonds that have maturities longer than 10 years. When you purchase a long-term Treasury bond, you’re basically agreeing to loan money to the federal government for an agreed-upon period of time, until the bond reaches maturity.