Bonds are fixed income instruments that represent a loan made by an investor to a borrower, typically corporate or government entities. They are used to finance various projects and operations while providing investors with regular interest payments.
Investors purchase bonds for income generation and capital preservation, as bonds typically pay fixed interest over a specified period and return the principal at maturity.
Bonds vary by issuer, maturity, credit quality, and yield, offering a range of options to meet different investment needs and risk profiles.
Bond investors receive periodic interest payments called coupons, which can be fixed or floating depending on the bond type. At the end of the bond’s term, the principal amount is repaid to the investor.
Bonds are considered less risky than stocks and often form an essential part of a balanced investment portfolio, helping to reduce volatility.
Regulated by SEBI and other authorities, bonds provide transparency and safety to investors while offering predictable income streams.