Stock market Given the huge ups and downs in many investors are now looking for other safe options and in such a situation the bond is emerging as an attractive option. It gives better returns than fixed deposits (FD) and other savings schemes. Also offers a lower risk than the stock market. Let’s know in detail.
What are bonds?
Bond is an investment instrument with a fixed income (fixed return). When governments or private companies want to raise funds, they issue bonds. These bonds fixed a certain interest rate and a fixed period, after which the investor gets its original amount back.
How much return can you get in bonds?
Bond issuing companies usually give 6 to 14 per cent returns, which is fixed. Investors can easily get 8 to 12 percent returns. This is a fairly good return compared to FD and other traditional savings schemes.
How safe are bonds?
There are mainly two types of bonds depending on the risk:
Secured bonds: These bonds are considered completely safe. The company issuing them has some property mortgage. If the company misses the payment, investors can claim that mortgaged property, which keeps their money safe.
Unsecured bonds: The risk in these bonds is quite high, as the company does not mortgage any property in it. If the company default, the investor’s money may sink.
(Disclaimer: This article is written only for the purpose of information. Please consult your financial advisor before any type of investment or before taking financial risks. India TV will not be responsible for any kind of risk.)
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