A bond is a fixed income instrument that represents a loan made by an investor to a borrower (typically corporate or governmental). A bond could be thought of as an I.O.U.(written evidence of debt) between the lender and borrower that includes the details of the loan and its payments. A bond has an end date when the principal of the loan is due to be paid to the bond owner and usually includes the terms for variable or fixed interest payments that will be made by the borrower. Bonds are used by companies, municipalities, states, and sovereign governments to finance projects and operations. Owners of bonds are debtholders, or creditors, of the issuer.
WHAT ARE Benefits of INVESTING IN BONDS?
» Investment returns are fixed – You receive a fixed rate of interest and your principal returned when the bond matures. You know exactly how much your returns will be
» Less risky compared to stocks – Besides receiving specified investment returns, bondholders are paid first over shareholders in the event of a liquidation
» Less volatile – A bond’s value can fluctuate according to the current interest and inflation rates but are generally more stable compared to stocks
» Bonds have clear ratings – Unlike stocks, bonds are universally rated by credit rating agencies like CRISIL, ICRA, and CARE. This gives investors more assurance when picking a bond but you probably still want to conduct your own research and due diligence before investing
» Security – Bonds are the safest bet in the investment market with a fixed income on a regular basis as per design, it gives you the protection of value against your actual investment & entire face value is returned at maturity
» Diversify – Diversify your portfolio with bonds to stabilize against market swings
» Tax Saving – Certain bonds assist in tax saving like municipal bonds
Who Should invest in bonds?
Risk-averse investors, retired individuals should ideally look at these kinds of instruments. There is no specific time to invest in these bonds unless one is willing to bet on the interest cycle which is meant for seasoned professionals. Investors should ideally look at investing in high-rated bonds for safety. However, those who are willing to take a slight risk of default can go for a lower-rated debt which gives a higher return.
HOW CAN ANS HELP YOU INVEST IN bonds?
» Quick and easy application process
» We provide facilities to buy bonds
» Timely updates of Bonds application status
» Pre-printed forms of applicant details
» Bid on your own sitting at home or through our appointed delegate at ANS
» Allotment information in the Demat accounts via SMS service
» Telephonic inquiry service available for Demat balance
» Facilitates trading of listed bonds ‘Over the Counter’ in the Secondary Market.
» Reduces client’s risk that comes through reckless intra-day trading.
» Funding through our NBFC Firm
» DP holders in different institutions can also apply with ease.