Maturity Value
Definition
The total amount receivable at the end of an investment's term. For FDs and RDs, maturity value = principal + compound interest. For PPF, it includes 15 years of contributions plus accumulated interest. Maturity value is guaranteed for fixed-income instruments.
Why is Maturity Value Important?
In the context of wealth creation and investing in India, Maturity Value is a fundamental concept. Whether you are investing in mutual funds via SIPs, fixed deposits, or retirement schemes like PPF and NPS, this metric helps evaluate potential returns and risks. The power of compounding and market volatility make it essential to track this indicator for any long-term portfolio.
Investors are encouraged to use specific investment calculators to project the future value of their corpus. Understanding this term enables better asset allocation, inflation protection, and consistent progress toward your ultimate financial goals.
What is Maturity Value?
Maturity value is the total amount you receive when a financial instrument (FD, RD, PPF, insurance policy) reaches the end of its term. It includes your original investment (principal) plus all accumulated interest or returns.
Maturity Value Formulas
| Instrument | Formula |
|---|---|
| FD | A = P ร (1 + r/n)nt |
| RD | A = P ร [(1+r/n)nt โ 1] / (r/n) ร (1+r/n) |
| PPF | Compound interest at annual compounding over 15 years |
Example โ FD Maturity
โน5,00,000 FD at 7% for 5 years (quarterly compounding): Maturity Value = โน5,00,000 ร (1 + 0.07/4)^(4ร5) = โน7,09,260