Securing Hannav Ledger...
Securing Hannav Ledger...
Glossary
Bond is a fixed-income debt instrument where the issuer borrows money from investors and pays periodic interest until maturity.
A bond is an IOU — you lend money to government or company and receive regular interest until they pay you back.
Indian bond market includes G-Secs, SDLs, corporate bonds, and tax-free bonds. Price inversely related to yields. Credit ratings from CRISIL, ICRA guide default risk. Retail access via debt funds, RBI Retail Direct, or broker platforms.
Buy ₹1 lakh 7.5% GOI bond paying semi-annual ₹3,750 interest for 10 years, receiving ₹1 lakh face value at maturity regardless of interim price moves if held.
Sovereign default risk is negligible for India, but price volatility from rate changes still affects mark-to-market value before maturity.
FDs offer bank guarantee up to insurance limit. Bonds may offer higher yield or tax-free status but trade on market with price risk.
Issuer can redeem before maturity when rates fall, limiting investor upside. Check offer document for call options.