Face Value

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DEFINITION of 'Face Value'

The nominal value or dollar value of a security stated by the issuer. For stocks, it is the original cost of the stock shown on the certificate. For bonds, it is the amount paid to the holder at maturity (generally $1,000). Also known as "par value" or simply "par."

INVESTOPEDIA EXPLAINS 'Face Value'

In bond investing, face value, or par value, is commonly referred to the amount paid to a bondholder at the maturity date, given the issuer doesn't default. However, bonds sold on the secondary market fluctuate with interest rates. For example, if interest rates are higher than the bond's coupon rate, then the bond is sold at a discount (below par). Conversely, if interest rates are lower than the bond's coupon rate, then the bond is sold at a premium (above par).

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  2. How does an investor make money on a zero coupon bond?

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  3. What are the advantages of using an effective interest rate figure?

    The primary advantage of using the effective interest rate figure is simply that it is a more accurate figure of actual interest ... Read Full Answer >>
  4. What is the difference between yield to maturity and the coupon rate?

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  5. How does face value differ from the price of a bond?

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  6. Why is my bond worth less than face value?

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  7. How long will it take for a savings bond to reach its face value?

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  8. How are treasury bill interest rates determined?

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  9. What is face value and how is it determined?

    Face value is defined as "the nominal value or dollar value of a security stated by the issuer." It is determined by the ... Read Full Answer >>
  10. What is the difference between a zero-coupon bond and a regular bond?

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  11. Can a church issue a bond?

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