Bonds are fixed-income instruments. These are generally used by companies, state and sovereign governments to finance projects. They are a type of security sold by the government and corporations, to raise money.
There are different types of bonds like Zero Coupon , Convertible , Non-convertible etc. So, you have many options to choose from.
Bond prices are inversely related with interest rates. This means, when interest rates go up, bond prices fall.
If you are someone who prefers a fixed amount of income, then investing in bonds is the best option, as you get fixed income in the form of interest.
Bonds of various kinds are available in the market like Gold Bonds, RBI Bonds, Corporate, Fixed rate, Floating rate, Treasury, Municipal, and many more.
Bonds have a maturity date. This is the day when you get your principal amount back. Also, before investing one should look for the rating. You should only invest in AAA rating which is considered as the highest rating.
Bond investments are considered as safe because they provide capital protection. If you are someone who prefers least risk investment options, then these are definitely the best option for you. And, if you are someone who highly invests in stocks, then you must consider bond investment to diversify your portfolio and protect against high market volatility. They pay interest twice a year.
As professionals at Financial Friend, we always keep ourselves abreast with any interest rate changes in the market and launching of any new instrument.
In that way, at Financial Friend you will always reap the benefits of any new investment opportunities coming in the market. Bonds are typically less volatile as compared to stock holdings, so your capital investment remains safe and intact.