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Corporate Bond: Today there are traditional to modern options available for investment. Most people believe that if you want to get high returns then you have to invest in the stock market. But in fact there are other low-risk investment options available besides the stock market. In which you can get more and fixed returns than bank FD. Today we are going to talk about corporate bonds among these options.
What is a corporate bond?
Corporate bonds are a type of debt. Companies issue bonds to raise money. In which investors get interest at a fixed rate. Investors get their investment back after the maturity of the bond. There are many types of corporate bonds. These include normal bonds, tax free AAA rated PSU bonds and perpetual bonds. In which the average return is 8 to 30 percent.
Invest like this
Companies issue bonds under public issue. You can buy bonds from stock exchanges (NSE/BSE) through a broker. But in this, issues related to liquidity, availability and effective returns have to be considered. One can also make a bond through an online bond platform. Corporate bonds tend to have lower volumes and higher transaction sizes. Therefore, most of the big investors like mutual funds, banks and insurance companies buy these bonds. However, after changes in SEBI rules, now retail investors can also buy.
Rupee. Start with an investment of Rs 10000
Retail investors in corporate bonds invested Rs. You can start with an investment of Rs 10 thousand. First at least Rs. Had to invest Rs 1 lakh. But SEBI reduced this limit to Rs. Work worth Rs 10,000 was done. Which also gives retail investors an opportunity to earn huge returns.
Tax
Indexation benefit is not available in debt mutual funds for the last one year. Currently, a 10 per cent charge is levied on profits on listed bonds sold after one year. Also, if you withdraw your investment before maturity, you have to pay higher tax.
returns on corporate bonds
Corporate bonds have less risk than the stock market. Corporate bonds issued by some of these companies have a negative degree of risk. Whose maturity can be up to 4 years. In which average returns range from 8 to 15 percent. A corporate bond with a higher rating may offer higher returns.
