Bonds
Get yourself a Regular Fixed Income
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What are Bonds?
Bonds are fixed income financial instruments. They are offered to the public by governments
or corporations to raise capital.
When you buy a bond from a company, you give your money to the company as a loan for a
fixed tenure. The company in return makes a series of fixed payments to you at regular
intervals. These are called coupons. At the end of the tenure, the company returns the initial
capital which you invested in the company back to you.
In India, not all indices and stocks listed on a stock exchange are allowed to trade in the derivative segment. They are a select few and are chosen based on certain criteria given by the stock exchange.
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How do Bonds work?
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Bonds are fixed income instruments which provide you with a regular income
stream. Want to earn a fixed income which is higher than the interest rates banks offer?
Want to completely avoid market risk and get guaranteed returns? Then invest in bonds
and fulfil your dreams.
Bonds provide regular fixed income in the form of interest which is credited into
your bank account. Bonds come with a maturity date and interest rate and frequency of payment is pre-defined.
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Bonds are issued by central or state governments or bug companies which want
to raise money. You can buy a bond in its IPO or even in the secondary market. Yes,
bonds are traded in the secondary market.
Bonds may be traded at a premium or at a discount in the secondary market.
You need to pay the full price of the bond to buy it in the first place. Once you buy a
bond, it is credited into your demat account in electronic format. You can see all your
bond holdings with other details in your demat account at any time.
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Regular coupon payments from the bonds are credited to your bank account.
Final payment comes on the date of maturity. This final payment usually also includes
the payment of m=nominal value of the bond along with the coupon payment.
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Why should you invest in Bonds?
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Bonds are fixed income securities
They provide a series of fixed income which is desired by some investors.
Hence, bonds form an important component of a well diversified portfolio. Other features
include
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Low Market Risk
Unlike equity, bond payments are fixed in nature and hence carry very low
market risk.
Less Volatility
Bond prices in secondary markets carry little volatility. This gives some piece of
mind to you as an investor when your equity portfolio is beaten down.
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Disclaimer- However, government bonds do not carry this risk.
What do we offer?
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Online Purchase
Algates Financial as is an Authorised Person of Cholamandalam Securities Limited that brings to you a platform to buy and sell bonds in the secondary market.
Demat Account
All you need to do is open a demat and a trading account with us to start investing in bonds. We offer a 5 mins FREE Demat Account opening facility.
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Daily Quotes
Prices of all the available bonds are quoted on a daily basis with duration and interest offered
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Sell anytime
Once you buy a bond, it is stored in your demat account in electronic format. You can sell any bond which you are holding at any time before maturity if
you find a suitable buyer in the market.
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Connect with our Growth Experts now for a valuable consultation.
