Fixed Investment Option

Treasury bills are among the safest investments and within easy reach of retail investors. It allows one active non-competitive bid per retail investor. Recently the RBI has auctioned treasury bills at higher cut-off yields. The central government raised Rs.10,000 crore through this auction. Retail investors need to be more aware of the  G-Sec  market. Here you can understand who should invest in t-bills and why.   What are T-bills  (Treasury Bills)?   Treasury bills (T-Bills) are the money market investment. These are short-term debt tools with a repayment guarantee on maturity. T-bills are offered at a discounted rate with three maturities. It can be a 91-days T-bill, 182-days T-bill and 364-days T-bill. The maximum maturity period is 364 days for zero-coupon rates. Investors can redeem them at face value during maturity.    The return on t-bills is the difference between the maturity value or the face value. For clarity, a 91 day T-bill, a face valu...

  Introduction Investing in bonds for risk-averse investors is a key strategy for meeting their needs. However, the low-interest-rate environment, combined with the booming economy, has led investors to seek out more lucrative opportunities in the bond market. Market-linked debentures  is one option that seeks to provide investors with a higher yield and is also tax-efficient. However, this alternative comes with higher risks. It is challenging to know the actual size of this industry. Estimates suggest that about Rs. 800–1000 crore worth of deals is done each month. If interest rates do not catch up, demand for this type of investment might continue growing. What are market-linked debentures? Market-linked debentures(MLDs) are a type of debenture issued by a company, where the return of the debenture is linked to the performance of a specified financial market index, such as Sensex, Nifty or Government security yield. This instrument does not provide any fixed payme...

  Introduction   Bond investments are globally one of the most popular means to provide financial security for a family.    As of 2020, the global  bond market’s   outstanding value was  $123.5 trillion .   Bonds  have been around for over a century and have proven to be a safe and stable way of investing money over a defined period.    As an investment option,  bonds  are helpful for both the economy and investors.    By providing finance to the government for its expenses, it helps grow a country’s economy.    For investors, it means protection from inflation and fluctuations in the stock market. Moreover, investors have lower risks when  purchasing a bond  than other investments.    Earlier, only the institutional investors participated in the  bond market .   However, with the advent of online platforms and various initiatives by the government, retail participation has...