What Are Bonds?

Also called fixed income securities since payments are fixed amounts Borrower agrees to repay a fixed amount of principal at a predetermined maturity date Borrower agrees to pay a fixed amount of interest over a specified period of time

Why Invest in Bonds?

They can provide current income for conservative investors At times, they can provide capital gains (or losses) for more aggressive investors Some bonds can provide tax-free income They can be used for preservation and longterm accumulation of capital

Bonds Versus Stocks

Compared to stocks, bonds offer lower returns Main benefits of bonds in portfolio:
Lower risk and level of stability High levels of current income Diversification

Bonds add an element of stability to a portfolio

The Inflation Indexed National Savings SecuritiesCumulative(IINSS-C) bonds will offer investors a return that's 1.5% more
than inflation based on the consumer-price-index. Interest will be compounded half yearly, enhancing effective yield on investments. The minimum investment limit is Rs. 5,000/- (five thousand). The maximum limit is Rs. 500,000/- (five lakh) per applicant per annum. Only retail investors would be eligible to invest in these securities. The retail investors would include individuals, Hindu Undivided Family (HUF), charitable institutions registered under section 25 of the Indian Companies Act and Universities incorporated by Central, State or Provincial Act or declared to be a university under section 3 of the University Grants Commission Act, 1956 (3 of 1956).

Inflation Indexed National Savings Securities-Cumulative (IINSS-C) is not tax free: While RBI offers a rate of interest over and above the benchmark inflation rate, the returns generated in form of interest is not tax free. - See more at: http://healthofmywealth.com/two-reasons-why-inflation-indexed-national-savingssecurities-cumulative-iinss-c-is-not-worth-investing/#sthash.gpAswGVh.dpuf