Investing in Corporate NCDs (Non-Convertible Debentures) offers a unique opportunity for investors seeking fixed returns. Corporate NCDs are debt instruments issued by companies to raise capital. These instruments are backed by the issuing company’s assets, providing an attractive option for income-focused investors.
Corporate NCDs offer fixed interest payouts, typically at a higher rate than traditional fixed deposits, making them an appealing choice for those looking for a steady income stream.
Types of Corporate NCDs
- Fixed Rate NCDs: These NCDs offer a fixed interest rate over their tenure.
- Floating Rate NCDs: These NCDs have interest rates linked to market benchmarks, offering flexibility in returns.
- Zero Coupon NCDs: These do not offer periodic interest but are issued at a discount to their face value.
Key Features:
- Higher Interest Rates: Corporate NCDs generally offer higher returns compared to traditional fixed-income options.
- Fixed Income: Guaranteed interest payouts provide a steady income stream.
- Liquidity: Buy and sell NCDs on the secondary market as per your investment strategy.
- Credit Rating: NCDs are rated by credit rating agencies, providing transparency regarding the issuer’s financial stability.
- Taxation: Interest earned on NCDs is taxable, but it may have tax benefits depending on the specific instrument and duration.
Corporate NCDs can be an excellent addition to your portfolio for those seeking a fixed income with potential higher returns. Invest in corporate NCDs today for consistent income and financial growth.