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Frequently Asked Questions
What is maturity date?
Like a loan, a bond pays interest periodically and repays the principal at a stated time, known as maturity.
What is bond?
A bond is a fixed income instrument that represents a loan made by an investor (bond holder) to a borrower (bond issuer). Governments, corporations, banks and municipalities issue bonds when they need capital. An investor who buys a government bond is lending the government money. If an investor buys a corporate bond, the investor is lending the corporation money.
Why to Invest in Fixed Income Securities?
While many investments provide some form of income, bonds tend to offer the highest and most reliable cash streams. Most important, a diversified bond portfolio can provide decent yields with a lower level of volatility than equities or any other asset class, and with higher income than traditional bank instruments like FDs.
Advantages of Investing in Bonds;
- Stability of Principal
One advantage of investing in fixed-income securities is peace of mind that comes from a capital preservation. Investors benefit by investing in fixed income securities as they preserve and increase their invested capital.
- Generates a Steady and Regular Income Stream
In addition to the benefit of capital appreciation, fixed-income securities provide investors with a steady stream of income. For example, by Investing Rs. 1,00,000 / - in bond with 12% annual coupon rate, investor has assurance to get Rs. 12,000 directly in bank account on yearly basis till the maturity of the bond.
- High Priority Claim to Assets
Fixed-income investors also benefit from their position in the capital structure of an entity issuing both equity and debt investments. Investors in bonds of a corporation have a higher priority over common and preferred stockholders of the same entity (issuer).
- Nullify Market Volatilities
The prices of Debt securities display a very lower average volatility as compared to the prices of equity or mutual fund
and ensure the greater safety of accompanying investments.
- Zero Credit Risk
Investors can even neutralize the default risk on their investments by investing in Govt. securities, which are normally referred to as risk-free investments due to the sovereign guarantee on these instruments.
- Efficient Portfolio Diversification
Fixed Income securities enable wide-based and efficient portfolio diversification and thus assist in portfolio risk-mitigation.
Is Tipsons A Regulated Entity?
About Tipsons
- Tipsons carry 25 years plus extensive experience of bond market
- Tipsons is considered amongst top 5 private category arranger for bond issuance across India
- First end to end technology driven bond trading house of India
- Research based offerings All product offering is backed by strong in-depth research.
About Tipsons Unique Offering
- Largest collection of Bonds & Debentures for Individual Investors in India.
- All important information related to bonds available on platform on fingertip.
- Senior team with extensive bond market experience available to assist on optimised Investment.
Tipsons’ existence will affect my investment?
No, you will receive your interest and principal accruals on your investment directly from issuer. Tipsons will assist if in case you require to liaison with the issuer.
Whom should I contact if I want to invest and need more information on bond market?
You may share your query in Live Chat or send us email on … or call us on ….
How much Tipsons is charging for its services?
As of now, Tipsons does not charge anything to its customers.
Is Tipsons a regulated entity?
Yes, Tipsons Group companies are regulated and registered either with SEBI or RBI.
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What can an investment bond be used for?
An investment bond is a long-term and tax effective investment plan for your future.
Contemporary investment bonds serve a range of purposes and can benefit a wide variety of investors.
In our experience most people use an investment bond to save for something significant – this could be retirement income, complementing your super, a child’s future, a home renovation or setting aside money for that once in a lifetime holiday. You may simply just want to save without the yearly tax return and paperwork.
TAXATION
There are different ways you can take money from your investment bond. The tax consequences can vary depending on how you choose to take money from your bond.
This guide will help you understand the way investment bonds are set up and how different ways you take your money can affect how much tax you pay. The examples in this guide are focused on taking a lump sum, but you will see from the ‘What can I do next’ section that there are different ways to take your money.
We strongly recommend that you read this or speak to an adviser before you make any decisions.
Tax treatment depends on your individual circumstances. Your circumstances and tax rules may change in the future.
- What is Sovereign Gold Bond (SGB)? Who is the issuer? Click Here
SGBs are government securities denominated in grams of gold. They are substitutes for holding physical gold. Investors have to pay the issue price in cash and the bonds will be redeemed in cash on maturity. The Bond is issued by Reserve Bank on behalf of Government of India.
