Basic Things to Know About Bonds For Investment

Dhheraj Jhunjhunwala17 Jun, 2022Finance

The most important features of a bond are: Nominal, principal, or face amount ? the issuer pays interest on this amount, and it is the amount that has to be paid back at the end. Redemption amount exists in some structured bonds which is different from the face amount and can be connected to the performance of particular assets such as a stock or commodity index, FOREX, or a fund.

Why do bonds provide better interest rates than fixed deposits?

Dhheraj Jhunjhunwala28 May, 2022Finance

Bonds are fixed-income instruments that offer predictable earnings. They are essential elements of a good investment portfolio because of their low risk and lucrative returns. Investors with a low-risk appetite or dependent on fixed returns are increasingly turning to buy bonds.

What are the advantages of bonds?

Dhheraj Jhunjhunwala06 May, 2022Finance

Bonds are less volatile than equity. Thus, they are considered to be safer assets than stocks. The safety enjoyed from investing in bonds helps balance the overall riskiness of an investment portfolio. The entities issuing bonds make interest payments at predetermined fixed intervals and rates. Hence, bonds are a great way to earn a regular and predictable income. For this feature, bonds are better than fixed deposits for retirees. India?s bond market has developed significantly in recent years. Today, investors can choose from a large variety of bonds as per their investment requirements. Bonds are available in different maturities, issuers, tax-saving features, interest rate mechanisms, etc. Bonds are tradable instruments. Hence, they are more liquid than traditional fixed-income assets like fixed deposits and small savings schemes.

Is fixed-income a good investment now?

Dhheraj Jhunjhunwala03 May, 2022Finance

1. Company Fixed Deposits The company fixed deposits, are basically done by promoter companies when they would require funding to promote their own business interests. Screening of the right company and investing is a good idea in these cases, one should do a good amount of research on companies and should then proceed with investments. Investors should, however, bear in mind that investments in these companies are not secured and they would not be able to take back their investments in case of default by the company concerned. 2. Government of India Bonds Government of India bonds are also a good option for investment, as these bonds are released by the government for capital funding of their pipeline or future projects. These bonds can be held by both Indians and Non-residential Indians; however investors pls note that investing in these bonds is taxable, under the income tax slabs, however, a wealth tax would not be applicable for investments made here.

Basic Things to Know About Bonds - BondsIndia

Dhheraj Jhunjhunwala21 Apr, 2022Finance

1. Bond Tactic for the Short Term - One of the simplest solutions for bondholders who expect rates will rise is to shorten the term of their bond portfolios. 2. Bond laddering - It is a technique that entails spreading your funds across a number of bonds with progressively longer durations, and is usually suggested for buyers seeking to produce income from bonds. 3. Reinvesting your interest income - It is a technique wherein you reinvest the interest of your bonds. Individual bond purchases necessitate discipline since you must put each coupon payment to work earning income rather than spending it.

What is a Non?Convertible Debenture IPO?

Dhheraj Jhunjhunwala21 Apr, 2022Finance

An NCD is a fixed-income instrument used by highly rated companies to raise funds from the public for a fixed tenure. It involves an interest rate and the return of the principal invested on the NCD?s maturity. It is called non-convertible as NCDs cannot be converted to equity. In comparison to convertible debentures, NCDs offer benefits like higher returns, liquidity, and low risk. An NCD IPO is the process of raising funds through this instrument for the first time in the primary market. A major difference between an equity IPO and NCD IPO is that allotment in NCD IPO is on a first come first serve basis.

Why do people invest in bonds?

Dhheraj Jhunjhunwala05 Apr, 2022Finance

When people think of investments, the first thought that comes to mind is the stock market. The stock market can be an exciting place when the markets are bullish and there is a general euphoria in the market. But what about times when there is a slump in the stock market? To deal with such unwanted risks, financial experts advise diversification of one?s investment portfolio.

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