These Bonds carry fixed rate of interest
which is declared at the time of issue and remains same
These Bonds carry interest rate which
is linked to independent reference rates, independent
index, commodities etc.and the rate is fixed for next
period at the beginning of the period itself.
This bond is issued at a discount
to the face value. The face value is paid at the maturity.
These bonds are also know as Zero coupon bonds or "Zeros".
It is the rate of interest which
the issuer pays on the principal/paid up value of the
Bond.It is fixed at the time of issuance of the bond.
It is the date on which the Bond
matures. Generally Bonds mature in a bullet form with
a single repayment on single date. But some bonds have
split or part redemptions with varying repayment dates.
The dates on which the issuer pays
out interest on the paid up value of the Bonds .
It is the frequency of payment of
interest on the bonds. It could be monthly, quarterly,
semi annually, annual or cumulative at redemption.
It is average rate of return on bond
if it is held to its maturity date and if all cash flows
are reinvested at the same rate of interest.
The ease with which securities can
be sold and converted into cash is called liquidity.
The point at which the term of investment
ends and proceeds are paid out.
Possibility that one would receive
less from investment than what has been put into it.
Fixed interest securities issued
by the Government to raise money for public expenditure.
In India these securities are issued by RBI on behalf
of Govt. of India by auction process.
It is short term unsecured instrument
issued by corporate bodies (both public and private)
to meet short term requirement of working capital. Maturity
varies between 3 months to one year. These can be issued
to any individual, bank, company whether in India or
These instruments are issued by scheduled
commercial banks excluding regional rural banks. These
are unsecured, negotiable, promissory notes having maturity
of 91 days to one year.
The corporate debentures are issued
by Indian companies, whether secured or unsecured, having
maturity of 18 months and above. These are issued in
certificate form and are transferable instruments.
These bonds are medium and long term
obligations issued by public sector companies where
the Government shareholding is 51% and more. Most of
PSU bonds are in form of promissory notes transferable
by endorsement and delivery. No stamp duty or transfer
deed is required at the time of transfer of bonds transferable
Tax saving bonds offer tax incentive
under section 88 .
These bonds offered option of encashment
at the end of every year on the holding period. As an
encouragement to hold the bonds for a longer period
the interest payable on these bonds increases with the
duration of the bonds.
Investment in these bond could result
in return in form of scholarship to children.
In these there was an option to receive
interest after deferment to certain period. It is a
good investment option for those who are to retire soon.
These bonds would give return at
rate linked to rate of inflation. The rate of return
could fluctuate with fluctuation in the rate of inflation.
If the rate of return is expected to be higher than
rate of inflation this bond would serve as perfect tool
for hedge against inflation.