Investment in Bonds and Non-Convertible Debentures (NCDs)

Bonds and Non-convertible debentures (NCDs) are long-term financial instruments, issued by corporates to raise funds through public issue or private placement. They acknowledge a debt obligation towards the issuer and usually come with a fixed tenure. Interest on NCDs can be earned monthly, quarterly, annually or cumulatively.

  • Investment in bonds / non-convertible debentures (NCD) are offered in both primary and secondary markets
  • Investment in bonds and NCD offer a good opportunity to investors to earn regular income and diversify the investment portfolio.
  • NCDs have higher liquidity as they can be traded on demand. Interest rates of bonds/NCDs are also a lot more stable and the issuer pays an interest “coupon” at pre-determined intervals.
  • Bonds are given a rating or grade that indicates their credit quality. This measures a bond issuer’s ability to repay the invested capital and interest on time.
  • The value of a bond is susceptible to change due to fluctuations in the market interest rate.
  • NCDs in demat form come with no TDS.
  • Diversification of investment in bonds from different issuers can lower investment risk.
  • WS FinServ has tied up with A.K.Capital Services Ltd., largest mobilizer of tax-free and taxable bonds in India and amongst the top Lead Managers for Public Issues of Debt.
  • Initial Public Offer forms for NCDs can be downloaded from our “Downloads” section

Summary: Higher returns, higher liquidity, taxation benefits and no tax deductions at source make investment in NCDs a suitable option. If an investor is looking for superior earning options to bank Fixed Deposit, then NCD investment is a definite solution.