- A government bond is a debt instrument issued by the Central and State Governments of India. Issuance of such bonds occur when the issuing body (Central or State governments) faces a liquidity crisis and requires funds for the purpose of infrastructure development.
- They are generally the safest type of investment
- Government bond in India is essentially a contract between the issuer and the investor, wherein the issuer guarantees interest earnings on the face value of bonds held by investors along with repayment of the principal value on a stipulated date.
- Even though government bonds have been made available to retail investors, allocating money without considering the pros and cons can be counterproductive.
- Government bonds carry lower risk compared to other assets like equities, as the returns are guaranteed by the government. There are some market-related risks, but by simply holding on to the bonds until maturity, you can nullify the risk.
- The government pays a fixed interest rate on the bonds and by remaining invested in government bonds until maturity, you can derive maximum yield.
- One can also consider investing in government bonds to diversify his/her portfolio as these are largely stable and perform well when other asset classes are under pressure
- We help through our associates to invest in perpetual bonds, which are AAA Bonds, Secured and Unsecured Corporate Bonds.
