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Repayment of a debt security or preferred stock issue, at or before maturity, at par or at a premium price.
Copyright © 2012, Campbell R. Harvey. All Rights Reserved.


1. In bonds, the act of an issuer repurchasing a bond at or before maturity. Redemption is made at the face value of the bond unless it occurs before maturity, in which case the bond is bought back at a premium to compensate for lost interest. The issuer has the right to redeem the bond at any time, although the earlier the redemption take place, the higher the premium usually is. This provides an incentive for companies to do this as rarely as possible.

2. The act of the issuing company repurchasing stocks or mutual funds. In the case of mutual funds, the repurchase is made at net asset value per share. Stocks may be redeemed in cash or by proration. See also: Proratable factor.
Farlex Financial Dictionary. © 2012 Farlex, Inc. All Rights Reserved


The retirement of a security by repurchase. Although generally used in reference to the repurchase of a bond before maturity, the term also applies to stock and mutual fund shares. See also partial redemption.
Wall Street Words: An A to Z Guide to Investment Terms for Today's Investor by David L. Scott. Copyright © 2003 by Houghton Mifflin Company. Published by Houghton Mifflin Company. All rights reserved. All rights reserved.


When a fixed-income investment matures, and you get your investment amount back, the repayment is known as redemption.

Bonds are usually redeemed at par, or face value, traditionally $1,000 per bond. However, if a bond issuer calls the bond, or pays it off before maturity, you may be paid a premium, or a certain dollar amount over par, to compensate you for lost interest.

You can redeem, or liquidate, open-end mutual fund shares at any time. The fund buys them back at their net asset value (NAV), which is the dollar value of one share in the fund.

Dictionary of Financial Terms. Copyright © 2008 Lightbulb Press, Inc. All Rights Reserved.
References in periodicals archive ?
To rise to the occasion, Arafat had to cater to the predominant mood of excitement and hope by injecting into his speeches in practically all those cities the same redemptory themes: liberty, independence, Jerusalem as the capital, the continuation of jihad, struggle to victory.
and his death can be regarded as a token of God's love for all mankind in the same sense as Christ's redemptory death." [48] For this reader, it is too good to be true.
He cites the Shema prayer of Judaism -- that daily prayer that affirms God's creative and redemptory roles -- and he reminds us that the Bible, too, is an attempt to remember all the stories, the poems and the rituals that can be viewed as Israel's attempt not to forget who God is and to whom we as a people ultimately belong.
Men would not be able to shake loose the violence between them, to make of it a separate entity both sovereign and redemptory, without the surrogate victim....
Previously, Martin Meisel ["The Ending of Great Expectations," Essays in Criticism 15 (July, 1965): 326-31] suggested that the novel ends circularly with Pip's return to the forge after his illness, which constitutes a "redemptory second birth," but Meisel found either of Dickens's endings acceptable as a "postscript." More of an amputator than Millhouser or Meisel, Thomas M.