Government & Debt Investment Options
Safe and reliable investment avenues backed by Government & reputed institutions
What are Bonds?
Bonds are an investment avenue in which an investor loans money to an entity such as a government or corporate body. The borrower pays interest at a fixed rate for a defined period of time.
Traditionally, the bond market did not attract retail investors. However, in recent times, lackluster equity markets and low interest rates have attracted investors towards corporate bonds.
Advantages
- Higher rate of interest
Disadvantages
- No security backing
- Interest earned is taxable
- Company credibility must be checked
7.15% RBI Bonds
Bonds issued by the Reserve Bank of India (RBI) offering 7.15% annual interest.
- Half-yearly interest payout
- Cumulative & Non-Cumulative options
- Tenure: 6 Years
Advantages
- Government backed
- Guaranteed returns
Disadvantages
- Interest is taxable
Government Securities (G-Secs)
Government Securities are issued by the Government of India and are considered one of the safest investment instruments.
These securities are held in demat form and carry zero default risk. However, liquidity may be limited.
- No default risk
- Suitable for conservative investors
- Requires market understanding