Investment in Bonds is necessary

by Ivan Khanna I am a writer

If you are a cautious investor, you might opt to buy bonds in India as they have good profit potential and are a remarkably safe investment option in india. It is advisable to find out about all the different options for buying bonds online and types of bonds in india that you have if you want to start in the bond market.

Firstly you can invest in any types of bonds investment:-

Ones that the national government sell - Government Bonds

Corporations offer some - Corporate Bonds

Local and state governments - State Development Loans

Unlike with ordinary stock exchange trading you can never lose the amount of money that you put in up front although you could lose out to inflation. This is why they are so safe for any of you who like to trade at low risk or anyone just starting out in buying online bonds in India.

Here are the 4 main types of Bonds in India.

The Indian government Treasury department offer government bonds from our Indian government. They can have any term put on them from short term 3 months to long term 30 years. Examples of these include T-Bills (Treasury Bills) and T-Notes (Treasury Notes). The backing these bonds get from the Indian Government through best bonds trading platform in india makes them the fixed income securities in India of them all but they do usually have low interest rates. Moreover you will only have to pay tax on the amount of interest that they give you.

The public securities market buy corporate bonds in india. In essence a corporate bonds is no more than a corporation getting rid of its debt. For this reason, they are for the medium risk investor but do normally offer higher yields bonds in india. Of course, if the business fails, you will not get any returns.

Bonds from state and local government is called state development loans bonds. These are very similar in their performance to the corporate bonds in india. They are more risky than government bonds as there are more challenges at the local level rather than the nation level. The big advantage with them though is that you do not have to pay any taxes on them whatsoever. Not even for the interest portion. There may be small state tax to pay sometimes though. The Municipal Bonds are a good example of this style of investing in bonds in india.

Foreign bonds are more difficult to get hold of. You often have to get them as a part of a mutual fund. Only consider these if you are a high risk investor. We have less control over the finances of other countries.

When your invest in bonds gets to its maturity date you have the option to start a new bond with the proceeds.

So, to summarize, the safest ones are the Indian Government long term government bonds and that is the place to start when you first buy bonds in india.

With the way that the economy is today I have had to become the money advice expert for our family and would like to share some ideas that I have found.