Fixed-income products are financial instruments that provide a predictable stream of income to investors. These instruments offer stability, safety, and regular returns. Here’s what you need to know:

1. Types of Fixed Income Securities:

• Bonds: Bonds are debt instruments issued by governments, corporations, or other entities. When you buy a bond, you’re essentially lending money to the issuer. In return, you receive periodic interest payments (called coupons) and the principal amount at maturity. Examples include NHAI Bonds, REC Bonds, and RBI tax-free Bonds.
• Fixed Deposits (FDs): FDs are offered by banks and non-banking financial companies (NBFCs). They provide a fixed interest rate over a specified period. FDs are safe and suitable for risk-averse investors.
• Debentures: Similar to bonds, debentures are long-term debt instruments issued by corporations. They pay fixed interest and have varying maturities.
• Public Provident Fund (PPF): PPF is a government-backed savings scheme with a lock-in period of 15 years. It offers tax benefits and a fixed interest rate.

2. Advantages of Fixed Income Products:

• Stability: Fixed-income products provide stability to your portfolio. They are less volatile than equities, making them ideal for risk-averse investors.
• Regular Income: Interest payments from bonds, FDs, and other fixed-income instruments offer a predictable source of income. This is especially beneficial for retirees or those seeking steady cash flow.
• Capital Preservation: Unlike equities, fixed-income securities prioritize capital preservation. Your principal amount is relatively safe.
• Tax Efficiency: Some fixed-income products, such as tax-free bonds, offer tax benefits. PPF also provides tax deductions.
• Diversification: Including fixed-income products diversifies your investment portfolio. It balances the risk associated with equities.

3. Who Should Invest in Fixed Income?

• Low-Risk Investors: If you prefer safety over high returns, fixed-income products are suitable.
• Retirees: Regular income during retirement is crucial. Fixed-income securities fulfill this need.
• Short-Term Goals: For short-term financial goals (e.g., buying a car, funding education), fixed income can be a stable option.

4. How to Invest in Fixed Income?

• Direct Purchase: You can buy bonds, debentures, and PPF directly from issuers or through brokers.
• Mutual Funds: Retail investors often participate in the fixed-income market through mutual funds. These funds invest in a diversified portfolio of fixed-income securities.

Remember, while fixed-income products offer safety, they may not provide high growth. Balancing them with other asset classes ensures a well-rounded investment strategy. 

We also offer clients with diverse fixed-income products, namely Non-Convertible Debentures (NCDs), Infrastructure and RBI Bonds, Company Deposits, etc. from some of the leading companies, and institutions in India.