Types of Bonds

In India, there are several types of bonds available for investment:

• Government bonds: These are issued by the Government of India are considered to be one of the safest forms of investment. These bonds are issued for various tenures and are low-risk investments.
• Corporate bonds: These are issued by companies to raise capital. Some of these bonds are typically higher-risk investments than government bonds, but also offer higher returns.
• Municipal bonds: These are issued by local government bodies to raise funds for specific infrastructure projects. These bonds are typically tax-free for investors.
• Public sector unit (PSU) bonds: These are issued by public sector companies in India, such Rural Electrification Corporation (REC), etc.
• Tax-free bonds: These are issued by government entities and public sector companies, and the interest earned on them is tax-free.
• Infrastructure bonds: These are issued by infrastructure development companies and are used to fund infrastructure projects.
• Zero-coupon bonds: These are issued at a discount to face value and do not pay any interest during the tenure. The investor receives the face value of the bond at maturity.