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What are bonds? Meaning, Types & Features

Bond is considered a loan from an investor to a government that involves borrowing money from lenders and then paying back money to bondholder over a fixed period of time.<br>

Devangthakkar
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What are bonds? Meaning, Types & Features

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  1. What Are Bonds?

  2. Description With so many investment options in the market, it can get a bit overwhelming at times with what could be the right investment approach. And one of the golden investment wisdom we often get from our investment advisors is diversification of your investment portfolio with mutual funds (debt and equity funds), shares, gold, and bonds like government and corporate bonds. Investment in Bonds can play a key ingredient towards a balanced portfolio. If stock markets go down, bonds can help cushion the blow. But not many aspiring investors have a thorough understanding of the bond market.

  3. What are the returns? Well, the first step to investing is to understand what to invest in. For beginners, bonds are a great place to start. Many financial advisors are working hard to help people understand more about bonds, especially those considering investing in them. So today for our readers, we will be talking about bonds.

  4. What are Bonds and how to invest? Bonds are a type of debt instrument that is issued by a government, a municipality, or a corporation (and sometimes by local authorities). They typically pay a fixed rate of interest every year. They come under fixed-income securities. In simple terms, Bonds are considered a loan from an investor to a borrower such as a company or government, that involves borrowing money from lenders and then paying back the borrowed money to the bondholder by periodic payments over a fixed time period with interest. The borrowed amount is called the principal amount.

  5. Features of the different types of Bonds. There are many types of bonds and it can be confusing to know about them all. The bonds are divided into two main categories: • Government Bond/ Government Securities: Bonds issued by the central or state government at periodic intervals. The tenure ranges from medium to long term, as per which the interest is paid on a half-yearly basis. • Corporate Bond/ Debentures: Bonds issued by public companies, it`s a secured corporate debt instrument that offers interest for funding its operations, but in the case of the unsecured debt instrument, it is also known as a corporate debenture.

  6. Thank You Visit: https://www.ajmeraxchange.co.in/blogs/what-are-bonds-meaning-types-features

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