Yubi – Bonds
Benefits of Investing in Bonds on Yubi
The bonds provide benefits to both investors (who buy bonds) and the borrowers (who issue bonds).
The benefits are:
Source of Income: It provides a predictable income stream – bonds pay interest twice a year.
Provides a saving platform: The investor gets back the total principal amount if the bond is held back till maturity, so bonds are a way to preserve capital while investing
Best Investment option:Bonds are generally regarded as lower risk than equities, and investors in bond funds are usually less exposed to volatility.
Interest earned is not taxable:The interest earned from municipal bonds is mostly exempted from taxes.
Improves Cash flow:Companies, governments, and municipalities issuing bonds benefit by raising money for various purposes.
✓When companies/businesses need to raise funds to finance new projects, maintain ongoing operations, etc., they may issue bonds
✓The issuer/borrower issues a bond that includes the loan terms, interest payments, and maturity date.
✓The investors willing to lend money for a specific period buy those bonds.
✓The initial price of most bonds is typically set at face value per individual bond.
✓The bond’s face value is paid back to the borrower once the bond matures.
✓The interest payment is part of the return that investors earn.
✓Bonds can also be sold by one investor (bond-holder) to another investor before it reaches maturity.
Why you should buy bonds on Yubi’s Bond Platform?
Bond platforms enable retail investors & individuals to buy bonds directly. The bond platform of YubiInvest offers discovery, transaction, and portfolio management services across multiple bond products. Transactions of thousands of crores from both individuals and institutions, covering around half of the covered bonds originated in the country, have been facilitated using this platform.
The most significant advantage of the Yubi bond platform is its easy access and fast processing. Using this platform, investors can buy and sell bonds quickly in just a few clicks. Issuers can also handle their portfolio and add bonds for sale within minutes.
✓For investing –Plutus is a tool for investing and liquidating fixed income securities. It allows you to find multiple fixed incomes (both primary and secondary trades) on a single platform. It also provides a complete history of the bonds, yield offered, and capability to place bids.
✓For selling bonds –Both primary & secondary bonds can be issued on the Plutus platform and match its diverse pool of investors.
What is the scenario of the bond market in India presently?
The Bond Market in India has transformed post-liberalization. This opening up of the financial market has influenced foreign investors to invest in the Indian bond market. Further, the bond market in India has diversified to a large extent, which is a massive contributor to stable economic growth.
What are Corporate Bonds & Covered Bonds?
Corporate bonds are debt securities sold to investors by corporations to raise finance for their operations. Repayment is made in total principal or interest earned over some time. However, these bonds are different from stocks. These bonds are legal contracts making it mandatory for the corporation to repay the borrowed money with interest at fixed intervals. Further, corporate bonds offer a higher rate of interest than government bonds.
Covered Bonds are a type of corporate bond. These bonds are a hybrid between asset-backed securities/mortgage-backed securities & standard secured corporate bonds. These bonds are primarily used by mortgage lenders that act as a tool for refinancing.
Why is there a need for a developed corporate bond market in India?
An efficient corporate bond market enables companies to raise capital in the primary market and help investors trade in and out of risks in the secondary market. The growth and development of the corporate bond market also fosters economic development.
How to avoid being cheated in the bond market?
To avoid being cheated, corporate bonds registered with the SEC should be bought by investors. It is advisable to avoid investing in all non-registered bonds.