What is Bond? – and how many types are there

 What is Bond?
What is Bond?

In today’s post, we are going to talk about What is Bond? and how many types are there? If you want to invest in Bonds, then it is very important for you to understand them.

If you want complete information about bonds, then you can get information through this post of ours.

What is Bond?

Bond is a Fixed Income Security Document, the way you buy shares by investing your money in the stock market, in the same way, you buy bonds by lending money to a company or government, in simple words –

If a private or government needs to raise capital, then it takes money from inverters and issues bonds in return. Through this bond, the government takes money on a loan for a certain time, in which the percentage of interest you will get on the bond purchased by you is already decided and in how much time the government will give this money, it is also written in it. The interest rate may also change depending on the formula

Through Bond Kya Hai, the Central Government, State Government, Municipal Corporation, and companies collect money for their projects. And instead gives a certificate, this is called Bond.

The bond’s time period can be from one year to five years or ten years or even more. This time period is also called MATURITY PERIOD. And when the bond period is over, you get your money back as per the prescribed terms and conditions.

Types of Bond – What is Bond?

There are many types of bonds in India, whose tenure and rate of interest differ.

1. Government Bond

When the government needs financial support for government work, it issues bonds and raises funds through it. Let us tell you that, government bonds are also called Treasury bonds. The money collected from government bonds is invested in government schemes.

In government bonds, you get a lot of interest in comparison to the bonds of other companies, but its biggest advantage is that there is no possibility of your money sinking in it. The responsibility of this money lies entirely with the government. That’s why government bonds are considered quite safe.

2. Corporate Bond

Corporate bonds are those which are issued through the private sector. Corporate bonds offer higher returns, but also carry a lot of risks. Therefore, before investing in corporate bonds, you should have complete knowledge about the company from which your money is safe.

3. Municipal Bond

When a local government or municipal corporation needs money to complete its project, to build roads or schools, or for government works, then the local government can also issue bonds. This type of bond is called (Municipal Bond). These are also very safe and get good interest rates on them too.

4. High-Yield Bond

This bond is a good option for those investors, it has the highest risk and with it, high returns are also available. For this reason, it is known as High-Yield Bond.

What is Bond? In India – How many types of bonds are there in India?

  • Corporate Bond Market
  • Municipal Bond Market
  • Government and Agency Bond Market
  • Funding Bond Market
  • Mortgage-Backed and Collateral Debt Obligation Bond Market

How To Buy A Bond In India

You need to be a citizen of India to buy the bond. If you want, you can buy the bond in your own name or even in a joint. If you are a minor then you can also buy bonds in the name of your parents, you just need to be an Indian citizen!

You can also buy bonds online or you can also buy bonds by visiting your nearest bank branch. You can buy easily with the help of a broker.

FAQ – What is Bond?

What is Bond?

When the government needs financial assistance to complete its work, the government issues a bond. This bond is called a debenture and it is like a loan.

How many types of bonds are there?

Government Bond
Corporate Bond
Municipal Bond
High-Yield Bond

What is Oil Bond?

Oil bonds are a type of security, which governments give to oil companies in exchange for cash subsidies.

Conclusion:

Friends, I hope you like our today’s article What is Bond? – and how many types are there. If you have any questions or suggestions related to this then you can tell us in a comment.

If you liked the information related to the bond, then do not forget to like it and share this information with your friends too, thank you!

Leave a Comment