The term to maturity is important because it provides the bondholder a time frame of how long he or she can expect interest payments and when the principal will be repaid. Also, the length of the bond's term does have an impact on the volatility of the bond. Generally, the longer the bond's term to maturity the more volatile it will react to changes in interest rates. Therefore, short-term bonds are more insulated from changes in the marketplace and exhibit relative low amounts of volatility or risk . While providing certain benefits, bonds clearly have considerable risks.
Bonds possess interest rate risk in that as interest rates go up, bond prices go down.
If you're a bondholder a interest rates rise, the market value of your bond has fallen because the discounted cash flows of future coupon payments are worth less. If this doesn't make sense, just remember that interest rates move inversely to bond values. If interest rates rise and you sell the bond before the maturity date, you will take a capital loss. This is the largest risk for bond investors. The return on your bond assumes that you'll be able to reinvest the coupon payments at the same interest rate as the bond.