In the
Fixed Income markets, face value is the
redemption value of the
instrument in question. Typically for
US Government
bonds,
bills, and
notes this is $1,000. In other markets - those, for example, dealing with
Corporate or
Municipal bonds this may be $5,000 or $10,000.
Face value is important since the
coupon payment received by the
investor is calculated as a
percentage of it.
For example, the owner of a US Government 6% bond would receive coupon payments of $30, twice a year; in other words, 6% of $1,000.