Interest, Maturity and Issuer Quality.
A bond is a debt instrument in which an investor lends money to an issuer, such as the government or a company, in return for interest and repayment of principal according to the bond's terms.
Types of Bonds
- Government Securities (G-Secs) — Issued by the government and carry sovereign credit standing, but their prices still move with interest rates.
- Corporate Bonds — Issued by companies; the yield offered depends on the credit quality of the issuer.
- PSU and Other Bonds — Issued by public sector entities and other institutions, subject to their terms.
Key Risks
- Credit risk — The issuer may delay or default on payments.
- Interest-rate risk — Bond prices generally move in the opposite direction to interest rates.
- Liquidity risk — You may not always find a buyer at the price you expect.
- Reinvestment risk — Interest received may have to be reinvested at lower rates.
How VALUE ADDITION Helps
We help you read credit ratings, understand maturity and yield, and consider how bonds fit alongside your other investments.
Important note
All investments carry risk, including the possible loss of capital, and returns are not guaranteed. Availability depends on eligibility and applicable regulations. This page is general educational information, not investment advice or a recommendation. We do not provide SEBI registered investment advisory or portfolio management services.