What is it?
Bonds are loans you give to a government or institution in exchange for periodic interest and return of principal at maturity.
Key Features
- G-Secs, SDLs, PSU and tax-free bonds
- Fixed or floating coupons
- Tenures from short to very long
Potential Benefits
- Relatively lower volatility than equity
- Regular income potential
- Portfolio stability and diversification
Risks
- Interest-rate risk
- Reinvestment risk
- Liquidity can vary by bond
Who May Consider It?
- Conservative investors
- Retirees seeking income
- Investors balancing equity exposure
Frequently asked questions
1. Can retail investors buy G-Secs?
Yes, through platforms such as RBI Retail Direct and stock exchanges.
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