Bonds Investment

Fixed-income securities include zero coupon bonds.   These bonds don't pay interest or coupons and the investor will receive the face or par value at maturity.   Many traders refer to zero coupon bonds as "Zeroes" because they don't pay any interest or coupons.   These bonds typically have a maturity date of 10-15 years.   They are therefore traded at a steep discount.   The maturity date affects the bond price. So why would an investor choose to invest in a zero coupon bond ?   These bonds are issued at a discount to their face value and can be traded at a discount. We will be discussing zero-coupon bonds and the factors investors should consider when investing in these instruments. What are Zero Coupon Bonds? Investors must first understand what a Bond is to understand how a zero-coupon Bond works.   A bond is a financial instrument that provides a fixed income for long-term investment.   Two parties, the investor and the issuer, agree to certai...

Tax-free bonds have been the preferred choice for wealthy investors over the past few years.   At the close of the fiscal year, there are a number of large infrastructure companies such as those of the IRFC, IREDA, REC and PFC that can raise funds by means of using tax-free bonds.   These tax-free bonds are an effective way of subsidizing the capitalization of infrastructure.   Tax-free bonds are available in two fundamental varieties.   Let's look at them more thoroughly. First, there are Section 54EC bonds, where you can receive an income tax deduction by investing the proceeds from the sale into Section 54EC bonds.   If, for instance, you sold the property you purchased the year 2007 to Rs.55 lakhs for Rs.1.20 million in 2017 you will not have to pay capital gains of the bonds by reinvesting the total of Rs.1.20 crore into Section 54EC bond.   The benefits of Section 54EC is available as a way to make the capital gain tax free.   The interest paid f...

You must be aware that mutual funds don't invest in only equities, as well as debt-related instruments.   Investors must select only mutual funds that align with their risk profiles.   This article provides details about corporate bond funds - which is a class of debt fund schemes. Corporate Bond Funds for Debt Any business can create corporate bonds. They are which are also known as non-convertible debt (NCDs).   Businesses or companies require capital to run their day-to-day activities as well as potential growth opportunities and expansion plans.   To do this, companies have two options - either through equity or debt instruments.   Debt is the safer option because it doesn't impact the shareholders directly.   Therefore, the majority of companies opt for the issue of debt instruments to raise funds to run their business.   According to their requirements the bank loan can be costly for businesses.   This is why bonds or debentures can provide ...