Bonds/Non-Convertible Debentures (NCDs)
Built for Stability, Designed for Income.
What Are Bonds?
Bonds are fixed-income instruments issued by governments, corporations, or financial institutions to raise money. When you invest in a bond, you lend money to the issuer in return for regular interest payments and repayment of principal at maturity.
Key Features of Bonds
Fixed or floating interest rates
Defined maturity period
Lower risk than equities
Regular predictable income
Wide variety—government, corporate, municipal, PSU bonds
Types of Bonds
Government Bonds (G-Secs)
Issued by the Government of India. Extremely safe with minimal risk.
Corporate Bonds
Issued by private or public companies. Offer higher returns than government bonds, with varying risk levels.
Tax-Free Bonds
Interest earned is exempt from income tax under Section 10 (when applicable).
Sovereign Gold Bonds (SGBs)
Government-backed bonds linked to gold prices; offer interest + gold price appreciation.
Municipal Bonds
Issued by local bodies for infrastructure projects.
PSU Bonds
Issued by Public Sector Undertakings; generally carry strong safety credentials.
What Are NCDs (Non-Convertible Debentures)?
Non-Convertible Debentures (NCDs) are fixed-income instruments issued by companies to raise long-term capital. They cannot be converted into equity shares, hence the term “non-convertible.”
NCDs typically offer higher interest rates than traditional fixed deposits, especially when issued by NBFCs and corporates.
Key Features of NCDs
Fixed interest (coupon) rates
Tenure usually between 1–10 years
Secured or unsecured options
Monthly/quarterly/annual interest payout
Listed on stock exchanges
Rated by credit rating agencies (CRISIL, ICRA, CARE)
Secured vs. Unsecured NCDs
Backed by company assets. Safer, with lower default risk.
Not backed by assets. Higher risk but often offer higher interest rates.
Benefits of Bonds & NCDs
Regular Income
Ideal for retirees and investors seeking fixed periodic returns.
Lower Risk
Less volatile compared to stock markets.
Portfolio Diversification
Stabilizes overall investment portfolio.
Higher Returns (NCDs)
Corporate NCDs can offer significantly better yields than FDs.
Liquidity
Listed NCDs can be bought/sold on exchanges.
Bonds vs. NCDs – Quick Comparison
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Feature
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Bonds
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NCDs
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|---|---|---|
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Issued By
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Govt, PSUs, Corporates
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Mostly Corporates & NBFCs
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|
Risk Level
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Very low to moderate
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Moderate to high (varies by rating)
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Returns
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Stable, moderate
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Higher returns
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Market Listing
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Many are listed
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Most NCDs are listed
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Ideal For
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Safety-focused investors
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High-yield seekers with moderate risk tolerance
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Who Should Invest?
Retirees seeking stable monthly or annual income
Conservative investors looking to avoid equity volatility
Individuals seeking better-than-FD returns (NCD investors)
Long-term investors wanting risk-balanced portfolios
How to Select Good Bonds or NCDs
Check credit ratings (AAA > AA > A)
Review issuer’s financial health
Prefer secured NCDs for safety
Compare coupon rates and payment frequency
Understand lock-in periods and maturity terms
Review liquidity if planning to sell before maturity
Bonds and NCDs are excellent fixed-income investments offering stability, predictable returns, and diversification. While bonds offer higher safety, NCDs provide better yields with slightly higher risk. Blending both can help investors achieve balanced, reliable, and goal-oriented financial growth.
Investment Solution
Mutual Funds & SIP
A Mutual Fund is an investment vehicle that pools money from multiple investors and invests it in a diversified portfolio of assets such as equities
Fixed Deposit & Corporate FD’s
Fixed Deposits (FDs) have long been a preferred choice for conservative investors seeking assured returns and capital protection. Offered by banks and NBFCs, FDs allow you to deposit
Bonds / NCD
Bonds are fixed-income instruments issued by governments or companies to raise capital, paying periodic interest and returning principal at maturity.
Government Bonds & Debt Instruments
In today’s unpredictable market landscape, many investors look for avenues that offer stability, regular income, and capital preservation.
Insurance
Life Insurance
Life insurance is a financial protection plan that ensures your loved ones remain financially secure in case of your untimely demise.
Health Insurance
Health insurance provides financial protection against medical expenses due to illnesses, accidents, and hospitalization. Even if you are healthy today, medical emergencies can arise at any time.
General Insurance
General Insurance provides financial protection against non-life risks such as accidents, health emergencies, property damage, theft, or liability.
Loans
Loans Against Security
A Loan Against Security is a credit facility where you pledge your financial investments—such as mutual funds, shares, bonds, insurance policies, or fixed deposits
Loans Against Mutual Funds
At Wealthmart Global, our Loans Against Securities (LAS) solution empowers you to access funds without having to liquidate your long-term investments.