Bonds

Types of Bond

Corporate Bonds

Private and PSU cos pay fixed coupon at regular intervals to investors

NCDs

Non Convertible Debentures offer higher returns and more security.

Fixed Deposits

Flexible tenures and attractive interest offered by NBFCs

Section 54(EC) bonds

Save capital gain tax by investing gains upto Rs50 lacs.

RBI Bonds

Invest in floating rate bonds issued by RBI for 7years.

Tax Free Bonds

Earn tax free income. Avoid hassle of complex tax filings.

Why invest in fixed income Market :

Portfolio Diversification

Bonds enable efficient portfolio diversification and thus assist in portfolio risk- mitigation.

Low Market Volatility

Bonds carry very low volatility as compared to the prices of equity or mutual fund.

High Priority Claim To Assets

Investors in bonds have a higher priority over common and preferred stockholders.

Regular Income Stream

Fixed – income securities provide investors with a steady stream of income.

Safety - principal Protection

Investors benefit by preserving and increasing their invested capital.

GUIDE FOR BEGINNERS

Tips Before You Invest in Bonds

Don't reach for yield

With higher yield, comes higher risk.

Define your objectives

If you don't know where you're going, you'll never arrive.

Assess your risk profile

Different bonds, carry different risks. Always know the risks before you invest.

Do your homework

Familiarize yourself with bond math. You should also read the bond's offering statement. It's where you will find a bond's important characteristics, from yield to the bond's call schedule.

Read the prospectus closely

Ask your broker for a copy of the prospectus or indenture to read it.

Buy bonds from brokers specializing in bonds

Make sure your broker knows your objectives and risk tolerance.

Plan to reinvest your coupons

This allows the power of compounding to work on your behalf.

Don't try to time the market

Avoid speculation on interest rates. Stick to the investment strategy that will best help you achieve your goals and objectives.