The positive relationship between bond yields and maturity lengths that is observed when interest rates on the long-term bonds exceed rates on short-term bonds. Securities with longer maturity periods usually have a higher yield, and vice versa. In this sense, the slope of the curve depicting this relationship is positive, i.e., upward sloping. This is normal because holding a bond for a longer period of time would bring about more risk because there is a greater risk of default by the issuer. Therefore, investors ask for higher return when investing their money for a longer period of time.

A normal yield curve is also called a positive yield curve.

Below is an example of a normal yield curve: