How to Invest in Corporate Bonds in India and How to Invest in Government Bonds in India
Investing in bonds is a tried and tested way of securing returns with relatively lower risk compared to equities. In India, the bond market offers a plethora of opportunities for investors, particularly through corporate and government bonds. This article will guide you through the steps and strategies on how to invest in corporate bonds and government bonds in India. Understanding Bonds Before diving into the specifics of corporate and government bonds, it’s essential to understand what bonds are. Bonds are debt instruments where an investor loans money to an entity (corporate or government) for a defined period at a variable or fixed interest rate. These entities use the funds for various purposes, such as financing projects, operations, or other expenditures. Why Invest in Bonds? Bonds are a critical component of a well-diversified investment portfolio. They offer: 1. Stable Income : Bonds typically provide regular interest payments. 2. Lower Risk : Compared to stocks