Bonds are one of the most popular fixed income products. They are essentially loans made by investors to companies or governments in exchange for regular interest payments and the return of principal at maturity. Bonds come in different types such as government bonds, corporate bonds, and municipal bonds, and they vary in terms of risk and return.
Market Linked Debentures (MLDs) are debt instruments whose returns are linked to the performance of the underlying market indices or assets, such as equities, commodities or currencies. Unlike traditional fixed income products, MLDs do not offer a fixed interest payment and their returns may fluctuate based on the performance of the underlying assets. MLDs are generally considered to be a high-risk, high-reward investment option and are suited for investors who are willing to take on market risk in pursuit of potentially higher returns.
Fixed deposits (FD) are also a popular fixed income product that offer investors a fixed rate of interest for a specific period of time. FDs are considered safe investments as they are offered by banks and financial institutions, and are generally insured up to a certain amount by the government.
54EC Bonds are a type of fixed income product that offer investors tax benefits under section 54EC of the Income Tax Act. These bonds are issued by National Highways Authority of India (NHAI) and Rural Electrification Corporation (REC), and invest in infrastructure projects.
Non-Convertible Debentures (NCDs) are another type of fixed income product that offer investors a fixed rate of return for a specified period of time. NCDs are issued by companies and are similar to bonds, but unlike bonds, they cannot be converted into equity shares.
