Invest in Bonds - Upto 20% Returns - Government Bonds vs Corporate Bonds - How To Invest in Bonds?

Описание: A Bond is a debt instrument in which the issuer company borrows money from the lender (bond holder) and, in return, is obliged to pay interest on the principle amount. The interest is called the Coupon rate.

A bond is a security that represents a loan from the buyer (you) to the issuer of the bond. The issuer can be a company or a government. The company/ government issues bonds when they want to raise money. In the government’s case, this money can be used to run the government’s daily operations, finance all sorts of projects for the development of the nation, repay the money borrowed from other countries and investors in the past, and much more. In the case of companies, they issue bonds to finance their operations, build new factories, for their working capital needs, etc.

Bond Related Terms You Should Know:

1) Maturity Date
Every bond has a particular end date. This date is known as the maturity date. The end date or the maturity date is decided by the Government/Company that issues the bond. At the end of this time period, the investors will get back all the money they were owed i.e. the initial amount they invested + the interest they made along the way.

2) Credit Rating
Credit rating is a grade given by Credit Rating agencies to help investors discern if the company is performing well or not.

3) Secured & Unsecured Bonds
Secured Bonds are bonds that are collateralized by an issuer’s asset or future cash flows. If the issuer defaults, then bondholders can claim the asset or the cash-flow generating source.

Unsecured Bonds don’t come with any collateral.

4) Face Value & Market Price
Face value is the price at which a Bond unit is issued by the Bond issuer.

The price at which bonds are traded is called the Market price.

5) Coupon Rate & Yield-to-maturity
The Coupon Interest Rate or Coupon rate is the interest rate paid by fixed-interest security such as a bond. It is the payment towards the face value of a bond. The bond-issuing company pays it to the bondholder.

The Yield-to-maturity(YTM) is the effective interest rate on bonds. YTM will vary inversely with the market price of the Bond. The Interest rate which most accurately reflects the rate the investor will receive at the time of purchase is the YTM.

There are two types of bond markets based on the stage of trading of the bonds – the primary market and the secondary market. When a bond is issued by the original issuer, the buying of that bond is said to take place in the primary market. All subsequent trading of the bond is done in the secondary market.

How To Invest in Bonds:

You can use following apps to invest in Bonds :

1) Paytm Money (Referral Link - https://paytmmoney.page.link/MhLjW9Pi...)
2) Zerodha ( Referral Link - https://zerodha.com/open-account?c=QR...)
3) Wint Wealth
4) RBI Retail Direct,etc.

Disclaimer: This is not Investment advice. Please do your own research before investing.