TOI-Online
Jun 22, 2023
You gain the advantage of predictable revenue. Additionally, if the bond is held to maturity, you can generate steady returns.
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According to the provisions of the bonds, periodic interest payments are made to bondholders on a monthly, quarterly, half-yearly, or annual basis.
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Compared to FDs, bonds have higher liquidity because the secondary market makes it very easy to buy or sell them. It is well recognised to offer the benefit of bond sales without a significant change in price.
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When compared to other asset classes, bonds always offer a good reward ratio. When compared to fixed deposits, it offers a larger return at virtually the same risk, while being far safer than equity and offering compound returns that are comparable.
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Capital protection, in particular for risk-averse people, is a big worry in the unpredictable stock market. It is well known that bonds always offer capital protection, safety, and liquidity.
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Bonds can assist you with portfolio diversification and balancing the risk-reward characteristics of various assets. It can possibly turn out to be a fantastic addition to your stock portfolio.
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You can lessen your tax liability by purchasing a few particular types of bonds. According to Section 80CCF of the Income Tax Act, tax-saving bonds are given particular benefits. You can get tax-free income by investing in tax-free bonds.
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These bonds typically include investments for the short term. These investments are likely to produce profits for investors quickly.
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