Fixed Investment Option

  Where to buy zero coupon bonds Introduction In FY22, public sector banks will get approx Rs. 15,000 crores capital infusion through zero-coupon bonds. In the last fiscal year, the amount was Rs. 20,000 crores. Public sector banks require capital infusion to meet their capital adequacy norms. The government being the major stakeholder, provides them with the capital required. Previously, the government issued bonds that would incur substantial interest costs. However, now the government has decided to issue  zero-coupon bonds  to save interest costs. What is a zero-coupon bond As the name suggests, Zero-coupon bonds are a type of bond that do not make any periodic interest payments (coupons) during the bond’s life. Instead, the investor buys the bond at a deep discount to its face value and then receives the face value of the bond when it matures, reflecting the fact that the investor is giving up all those periodic payme...

  Introduction   Corporate bonds have become a popular investment choice because they offer relatively stable income streams, and they’re generally less risky than investing in stocks.   As per a report, in 2025, the corporate bond market might reach  Rs. 65-70 lakh crore  from  Rs. 33 lakh crore  in 2020.  Corporate bonds are debt instruments issued by corporations. Corporations can raise money for their ongoing operations, M&A, or to expand the business. Investors provide money to the corporations in exchange for interest payments and principal repayment at maturity.  Corporate bonds interest rates in India tend to be higher than other investment options, such as savings accounts, public provident funds,  government bonds , fixed deposits etc, thus, giving the investors the potential to earn more returns.  Where to Buy Corporate Bonds in India?    Individuals can invest in corporate bonds in India in the followi...

  Introduction   Despite market volatility, experts believe that the outlook of  public sector undertakings  (PSUs) bonds is compelling.   Usually,  PSU bonds  provide a return of  8% to 9% .    Bonds are a significant part of the public sector's budget.  Bonds  are defined as securities that pay a fixed interest to the investors.   When public sector undertakings create debt, it is called  public sector undertakings bonds .    A public sector undertaking ( PSU ) in India  is an entity (in the form of companies or public banks) in which the central or state government has a majority stake ( more than 51% ).    The money raised by  PSU bonds  is used to finance projects such as infrastructure projects, railways projects, etc., undertaken by the company.   How to invest in PSU bonds in India?    If individuals want to  buy  public sector bonds  in India , ...

Tax-free bonds are low-risk government securities. As per the provisions given under section 10  (15) (iv) (h) of the Income Tax Act, 1961, the interest on these tax-free investments in India is completely exempted from the income tax.     There is no interest on tax-free bonds and this gives them their name. Usually, tax-free bonds have a predefined rate of interest, and the money generated from them is used by the government to invest in infrastructure projects in the country.        What are Tax-Free Bonds?   Tax-free bonds are  government-issued securities  with a long-term maturity period of 10 to 20 years. They are a safe haven for your hard-earned money as the risk of non-payment on these bonds is almost nil.     Tax-free bonds are primarily issued by government-backed bodies, to fulfil particular objectives.  Municipal bonds  issued by Municipal corporations are an example of  tax...