Bonds are debt instruments/ fixed income securities that let the holder enjoy interest until its maturity (in case of fixed maturity bonds) or in perpetuity (in case of perpetual bonds).
Bonds attract a better coupon rate (9% - 11%) as compare to fixed deposits that give an approximate return of 7%.
Bonds can be sold or bought at any time as they are listed on the exchange. The money shall be reflected in the seller's bank account within 48 hours of the trade (subject to bank working days).
These bonds do not have any lock in period. Investor can sell the bond without sacrificing the interest accrued until the bond is held.
A wide variety of companies and public sector banks like IDBI, Syndicate Bank, Bank of India etc. offer these instruments with varied terms, maturity and coupon rate etc.
Bonds that are held in the DEMAT form are not eligible for Tax deduction at source ( TDS )
Bonds represent a unique opportunity for capital appreciation. With every 1% cut in bank rate; the bonds rally upwards by 3% - 4% and vice versa.
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