5 Things Nobody tells you about Bonds in India.

We understand that to educate people about the benefits of investing in bonds in India (particularly corporate bonds), we must discuss certain issues that investors should be aware of.

Here is a list of 5 significant points relating to investing in bonds,

Bonds are not the same as stocks.

Almost everyone in India is intrigued by stocks and the possibility of high returns. However, there is a risk: extreme market volatility and the possibility for heavy losses.

Bonds, on the other hand, offer consistency in income over time as well as capital security. When a person reaches a certain level of capital stability and wants to preserve/save money in addition to earning interest, they must purchase bonds. Set aside a portion of your portfolio for bonds to earn a decent income and to help with risk diversification.

Credit Rating is essential

Almost all corporate bonds in India have a rating that indicates the underlying company’s financial strength. Credit rating agencies, which are regulated by SEBI, give this information. The highest rating is AAA, followed by AA, A, BBB, BB, B, and so on, all the way down to D, which denotes a corporation in default.

Before investing, make sure to research the ratings and keep an eye on your bond portfolio for any changes.

Maturity Date

Pay attention to the bond’s maturity date, which is the period until you receive your capital back.

Call and Put Date

The term ‘call date’ refers to the issuer’s opportunity to repay your principal before the maturity date. This is especially important for bonds that are in high demand and trade for more than their face value of 100, as the investment returns may be impacted if the issuer calls the bond before it matures.To educate people about the benefits of investing in bonds in India

The term “put date” refers to the investor’s potential to demand the issuer return the principal before the maturity date. This is advantageous for investors purchasing bonds that are trading below par value.

As a result, it’s best to be attentive and find out if the bond you want to buy has any Put/Call dates and price it according to those dates rather than the Maturity Date.We understand that to educate people about the benefits of investing in bonds in India (particularly corporate bonds), we must discuss certain issues that investors should be aware of.

Bond Investment Online

Bond investing is getting easier and more transparent online, along with everything else. However, the convenience of online investing does not show the underlying risk.

Ensure that you use safe payment methods or gateways that have been approved by regulators.
Check to whom you’re sending your money — this is known as counterparty risk.
Inspect whether the company is a financially sound, regulated company, a subsidiary of a larger financial institution.

Bonds in India provide investors with a purpose of security and stability. Adhere to these basic thumb rules, and you are good to go. Start your investment journey with Smest. Want to know about bond prices India? Visit https://smest.in/