Currently, the stock market has become unstable. Sometimes the index goes up like a rocket and sometimes it comes down at twice the speed. In such a situation, investors are at risk of suffering huge losses. Betting in an unstable market can be risky. Small investors are not able to recover from the shock of suffering losses. Needless to say, in such a situation, many investors are looking for other investment options. Certainly, bonds can be a good option for such investors. By investing in bonds, investors get higher returns than FD and other saving schemes. Along with this, the risk is also less here as compared to the stock market. This is an income source with fixed returns. Let us tell you that apart from governments, private companies also issue bonds. Whenever the government or a private company needs money, they issue bonds. Bonds are issued for a fixed rate of return and a fixed period.
How much return do you get in bonds?
Usually, companies issuing bonds give returns between 7 to 14 percent. This is the fixed return offered by the companies. Investors can easily get 9 to 12 percent returns by investing in bonds. In a way, you get better returns in bonds than FD and other saving schemes.
Are bonds safe?
Let us tell you that there are two types of bonds. One is a secured bond and the other is an unsecured bond. Talking about secured bonds, they are completely safe. There is almost no risk of loss by investing in it. In a way, investing in it is completely safe. This is because secured bonds come with collateral. That is, whatever money the company is taking from you, it keeps something mortgaged in lieu of security to repay it. Which can be seized in situations like default.
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Unsecured bonds are unsafe
As far as unsecured bonds are concerned, there is a big risk in them. Because in this the company does not pledge any of its assets. If you are investing in an unsecured bond and if that company defaults, then all your money can be lost.
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