Face amount

The face amount is the value stated on the face of a financial instrument. The term usually applies to the amount stated on a bond certificate, which the issuer is obligated to pay when the bond matures. This face amount is usually set at $1,000. A bond can sell at a discount or premium to its face amount, depending on the interest rate that an investor wants to achieve. Thus, paying less than the face amount results in a higher effective interest rate, while paying more than the face amount results in a reduced effective interest rate.

The amount paid out on a life insurance policy (such as $100,000 upon the death of the person named on the policy) is also termed the face amount.

Face value can also refer to the amount stated on a coin or banknote.