Bond Investing

Benefits Bond Investing ( mainly in Government Securities) in India does not attract tax deduction at source. This is one of the Bond Investing benefits

1. Additional Income Tax benefit based on tax laws of the country
2.Qualifies for SLR purpose
3.Zero default risk being sovereign paper
4.Highly liquid.
5.Transparency in transactions and simplified settlement procedures through CSGL/NSDL.

What is Primary Dealer in Bond Market?

The Company is a Primary Dealer appointed by the Reserve Bank of India for participating in Government Securities Market.

Why Would You Invest in Bonds?

Most everyone knows that over the long-run, nothing beats the stock market. This being the case, why would anyone invest in bonds? Although they pale in comparison to equities in the long run, bonds have several traits that stocks simply can't match.

First, capital preservation. Unless a company goes bankrupt, a bondholder can be almost completely certain that they will receive the amount they originally invested.

Secondly, bonds pay interest at set intervals of time, which can provide valuable income for retired couples, individuals, or those who need the cash flow.

Bonds can also have large tax advantage for some people. When a government or municipality issues various types of bonds to raise money to build bridges, roads, etc., the interest that is earned is tax exempt. This can be especially advantageous for those whom are retired or want to minimize their total tax liability.

Bonds are a core element of any financial plan to invest and grow wealth. If you are just beginning to consider investing in bonds, use this section as a resource to educate yourself on all the bond basics.

Fixed Income Securities - A fixed-income security would be a 5% fixed-rate government bond where a $1,0000 investment would result in an annual $500 payment until maturity when the investor would receive the $1,0000 back. Generally, these types of assets offer a lower return on investment because they guarantee income.

Municipal Bonds - Municipal bonds are issued by state and local governments and their authorized agencies to pay for various public projects such as highways and other infrastructure needs. "Municipal bonds make better sense if you're in the higher tax brackets," says Financial Planners "They have low yields, but the triple-tax benefit looks good to wealthier investors."

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