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Why Your Parents Chose Fixed Deposits and Why You Don’t Have To in India | IndiaBonds

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Why Your Parents Chose Fixed Deposits and Why You Don’t Have To in India | IndiaBonds

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Indians prefer fixed deposits because they offer fixed and assured investment returns. Refer to this article to know more about Fixed Deposits at IndiaBonds

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Why Not to Invest in FDs? - Check Investment Better than FD at IndiaBonds

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Check why your parents chose FD for investment and why you should not invest in FD today. Explore investment better than fixed deposit (FD) at IndiaBonds! Visit now

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The Indian Bond Market is $2 trillion in size | IndiaBonds

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The Indian Bond Market is $2 trillion in size | IndiaBonds

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That's about to change as a market with a current value of over $2 trillion expands quickly & financial engineers devise new strategies for branding such debt. Read now at IndiaBonds

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Writer # Indiabonds | March 5, 2021

Yes - the Indian bond market is indeed worth ~US$ 2 trillion! That's about INR 150,000,000,000,000

Global Sizing

The purpose of this article is to break the myth that bond markets are only for a select few or that they represent only a small proportion of financial markets in general. As of 2019, the world's GDP was estimated to be US$87 trillion, world equity marketcap stood at US$95 trillion and the global bond market at US$106 trillion (Source: SIFMA).

The stats for the largest economy in the world are even more interesting. US GDP in 2019 was estimated to be US$21.5 trillion. It's equity marketcap was at US$37.5 trillion but it's bond market was a whopping US$41 trillion! (Source: SIFMA) Now we all know that these numbers on aggregate market sizing have only increased in 2020-21 due to the huge stimulus and liquidity injection by the US post Covid-19, whilst GDP has stalled.

Let's take a look at these numbers for India. Estimates of GDP stand at US$2.7 trillion with equity marketcap at almost the same number of US$2.75 trillion (Source: BSE). As you already know, the Indian bond market stands at about US$2.05 trillion (Economic Survey). It is striking to observe that although the bond market in India is large, it has a large scope for an explosive growth from here.

Market Structure

The bond markets in India have matured significantly in the last ten years providing a relatively safe investment avenue for investors. The broad segments of the market are Central Government Securities (G-Sec), State Development Loans (SDL) and Corporate Bonds. Market depth in these securities has experienced consistent growth in terms of primary issuance as well as growing trading volumes in the secondary market.

RBI regulates G-secs, SDLs and money markets while SEBI regulates the Corporate bond market. If you were not already aware, you will be surprised to know that almost everyone is already indirectly an investor in the bond markets. This is because the largest institutional investors into bond markets are all the Insurance companies, pension funds and mutual funds. Apart from the domestic institutions, the other category of large investments come from FPIs (Foreign Portfolio Investors). Another aspect that is gradually growing is the retail and individual investment participation specifically in the corporate bond market. At IndiaBonds, it is our endeavour to accelerate this adoption by retail, as bond markets are not only large but also trusted by almost every type of institutional investor.

The Indian Context

Structurally, the debt market remains skewed towards government securities (G-secs). The domestic debt market in India amounts to about 74% of GDP while the size of India's corporate bond market is a mere 18% of GDP. To put it into perspective, according to the Economic Survey, while the outstanding Government securities stock stands at Rs. 115.87 lakh crore (Nov'20), the outstanding corporate bonds are Rs. 35.87 lakh crore (Dec'20)

However, the entire bond market in India has grown at an impressive 14.68% CAGR (Compounded Annual Growth Rate) in the past 10 years. This is represented in the graph below:

Within the overall bond markets, our singular focus remains on the corporate bond market as it offers a wide variety of higher returns to individual investors. Furthermore, there has been a notable expansion in these markets in the last 10 years, where outstanding debt has grown at a CAGR of 15% from Rs 8.33 lakh crore to Rs 30.7 lakh crore during FY10-FY20. There has also been increased policy focus to develop and deepen the corporate bond markets given their growing importance and untapped potential. The government and regulators (SEBI and RBI) are taking measures to address the various issues that constrain the growth and development of the corporate bond markets.

Outlook for the future

The projected growth of India's GDP to US$5 trillion in next few years is going to be funded largely by credit provided to corporations through the bond markets. We have already witnessed this in the western economies where the corporate bond market is a large percentage of GDP (upto 50-65% in some cases). As India transitions from a developing to a developed economy, sophistication and and depth of its financial markets hold the key to economic upliftment.
Households that transfer their huge savings to investments, and in this case to a safer asset class of corporate bonds will likely spur an exponential growth of corporate bonds and provide the funding for India's credit story. It is our effort at IndiaBonds to be a catalyst of this growth and make bond investments easy for individuals. Currently bond markets are big - however, they are only going to get bigger! Don't get left behind....

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Size of the Indian Bond Market is US$ 2 trillion! - News and Insights | IndiaBonds

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Yes - the Indian bond market is indeed worth ~US$ 2 trillion! That's about INR 150,000,000,000,000 Global Sizing The purpose of this article is to break the myth that bond markets are only for a select few or that they represent only a small proportion of financial markets in general.

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Know the Relationship Between Bond Price & Yield to Maturity | IndiaBonds

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Know the Relationship Between Bond Price & Yield to Maturity | IndiaBonds

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Know about the relationship between bond price and yield to maturity. Refer to this article to know more about Bond Prices and Yields at IndiaBonds

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Relationship Between Bond Price and Yield to Maturity | IndiaBonds

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Know about the relationship between bond price and yield to maturity in this blog. Visit the website to get more information & invest in bonds online.

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What is Sovereign Gold Bond? Know Benefits & Features | IndiaBonds

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What is Sovereign Gold Bond? Know Benefits & Features | IndiaBonds

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Sovereign gold bonds act as a safe investment option for people because gold prices are less sensitive to changes in the market. Read now at IndiaBonds

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Writer # Indiabonds | September 1, 2021

The History of Gold

Currency notes globally used to be backed by actual gold 50 years ago! In current times, as people get more disillusioned by the paper money being printed by nations to pump liquidity in global markets, gold as storage of value and investment becomes important. India is the biggest consumer of gold in the world and in 2020-2021 alone we imported INR 2.5L crore (~US$ 34 bn).

However, STOP buying physical gold as a form of investment and storage of your wealth when you can buy Sovereign Gold Bonds instead!

Buy Sovereign Gold Bonds (SGBs)

Gold Bonds are government securities issued by the Reserve Bank of India (RBI) and are backed by the Government of India by actual physical gold that it owns. The price of the SGBs is directly linked with price of physical gold. This is a security issued mostly for retail investors and includes applications by HUF/trusts. In a single year, an individual or HUF can apply for a minimum of 1 gram and a maximum of 4 kg in gold bonds. For entities, trusts and corporations, however, the maximum threshold increases to 20 kg. SGB also pays an annual interest of 2.5% and issued for a tenor of 8 years.

Individuals can invest in SGBs and hold it in their Demat account without facing the burden of investing in physical gold.

The RBI introduced SGBs under the Gold Monetization Scheme in 2015. The RBI announces the issue of these bonds in a press release and investors can only purchase these bonds within a one-week window almost every month.

What are the benefits of Gold Bonds?

Lowest risk - SGBs are issued by the RBI on behalf of the Government of India. This is the lowest financial risk possible as your money is assured by the government itself.

No storage hassle - Physical Gold has issues with storage and safety. It also needs guarding against potential theft plus concerns with transportation. SGBs on the other hand are in your demat account in the form of digital security.

Additional Interest income - Physical gold is a 'dead' investment since it earns you only potential capital gains. SGBs on the other hand get you capital gains as well as pay you interest of 2.5% annually without any TDS. So, if you keep your bonds for 8 years, you have made 20% more versus physical gold!

Zero capital gains tax - As the bond pays the underlying price of gold in 8 years at redemption, there are zero capital gains tax on any gains that you make due to gold appreciation. This is not the case for physical gold and therefore is a huge advantage!

Liquidity/transferability - Sovereign gold bonds can easily be bought online and even transferred to someone else. Since they are listed on the exchange, you can even trade them in the secondary market. This is not the case with physical gold

Loan Collateral - You can easily use your SGB as collateral and take a loan upto 75% of its value usually. IndiaBonds is happy to facilitate this for you.

Stable Investment - Gold prices are less reactive to market fluctuations and therefore, they're a relatively stable and secure investment.

Investing in Sovereign Gold Bonds with IndiaBonds

IndiaBonds makes it easier for investors to buy Sovereign Gold Bonds online. Invest from the comfort of your living room!

It's easy, convenient and hassle free

Get Rs 50 as discount on your transaction

Simplified payment methods

Get Assistance from experts in case of queries

Invest in just 3 simple steps :

1. Select - Go online on Sovereign Gold Bond Portal and select the amount you want to invest

2. Verify - Do a simple KYC for identification purposes and link your demat and bank accounts.

3. Online payment - Make your payments using established online payment portals and book your gold bonds!

Sovereign Gold Bonds are really a gift given all the advantages and ease of investment. It's time to invest on you own or even gift it to your loved ones!

In early civilizations it was signified as a sign of power, beauty and even immortality.

Gold doesn't ever corrode, rust or oxidize

It retains its shine and purity even if its's placed in water for years

It is malleable (can be melted), transformed into different shapes and is easy for transportation

Gold was used as a medium of exchange for international trade as early as 1500 BC by Egyptian empire

Use of gold coins as monetary system was wide at the height of Roman empire in 50-150 AD

Most of the modern world nations continued to use gold for global trade and store of value in 20th century until 1976 when US stopped backing their currency with gold (Bretton Woods accord) and hence started the use of paper money

Gold melts only at 1,064 degrees centigrade temperature!

Disclaimer: Investments in debt securities are subject to risks. Read all the offer related documents carefully.

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What is Sovereign Gold Bonds & its Benefits, Features | IndiaBonds

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Discover the benefits and advantages of the Sovereign Gold Bond scheme. Understand what the scheme entails, its advantages, and the benefits of investing in Sovereign Gold Bonds.

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Bonds in India: 7 things they don't tell you | IndiaBonds

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Bonds in India: 7 things they don't tell you | IndiaBonds

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Check out these 7 important bond investment tips that most people will not tell you. Read this article to learn more at IndiaBonds

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7 Things they DON’T tell you about Bonds in India | Indiabonds

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Take a look at these 7 critical points relating to investing in bonds, that most people DO NOT tell you. Read this article to learn more!

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Different Types of Bonds in India | IndiaBonds

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Different Types of Bonds in India | IndiaBonds

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Types of Bonds: Discover different types of bonds that you can buy online and understand their key features. Read now at IndiaBonds to know more about Types of Bonds

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Bond IPO: Features, Advantages, Payment Procedure, & Debt Allotment | IndiaBonds

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Bond IPO: Features, Advantages, Payment Procedure, & Debt Allotment | IndiaBonds

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IndiaBonds provides detailed explanations of bond IPOs including their Features & Benefits, payment procedure, allotment, and other factors. Read now

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Writer # Indiabonds | December 10, 2021

Introduction

Economic growth for a country is led by public investment done by the government and private investment done by companies. This requires money (or capital) from other people; as owners themselves may not have all the resources to invest in growth. Traditionally in India, banks have been the primary source of capital for firms. As the economy modernizes and banks face lending constraints, financial markets become an important provider of capital in India. Companies raise this capital through bonds (debt) and equity issuances from the markets as this gives them greater ability to grow and expand.

What is an IPO?

The meaning of an IPO is Initial Public Offering. It literally means issuing securities of the company for the first time to the public for investment. This is the stage where a company, which had been held privately by a handful of promoters/investors, is now raising money from the public in general. The term IPO has become popular due to the equity market as it has been in practice there for many decades. Hence, when a company raises money for the first time from the public in the form of bonds - it's called a Debt or Bond IPO.

However, in debt markets, companies raise capital via public issuance of bonds quite frequently, sometimes even more than once a year. Market participants in general call every public bond issuance as an Initial Public Offering, or an 'IPO', which is technically incorrect since the word IPO only stands for raising initial capital or for the very first time. Subsequent issues are termed 'Public Issues of Bonds'. For this article we will use the term 'Debt Public Issue' and 'Bond IPO' interchangeably.

Why do companies do Bond IPO?

Companies raise debt from investors either in the form of Bond IPO (public issue) or via debt private placements. These private placements are mostly for large institutional investors only and usually out of reach of individual investors who may not have access to the timing/details of such issuances. Also, there are restrictions placed on a company by Security and Exchange Board of India (regulator) on:

1. Number of private placements in a year

2. High minimum investment amount. Hence the private placement market becomes a 'big boys only' investment option.

Initial Public Offering is done by companies to target individuals and raise capital from them. India has a very high savings rate of 28.35% in 2020 as per the World Bank (%age of GDP). IPO for Bonds aim to transfer this share of savings into productive investments for growth by tapping various sources of funds which may not be easily accessible otherwise. Companies find this form of retail investments to be beneficial as this provides a long term and additional pool of capital for them.

Benefits of Bond IPO for investors

Debt Public Issues are done to attract individual investors who can derive a lot of additional benefits by subscribing to these. A few key advantages are:

Low Minimum Investment: The biggest benefit of investing in Bond IPOs is that you can invest in bonds as low as Rs.10,000! This is truly a product for individuals and helps them to channel their savings, from meagre returns providing Fixed Deposits, to higher and stable returns from bonds.

Higher Interest Rates: Companies mostly offer higher interest rates to individuals than institutional investors in Bond IPOs. Hence, individual investors tend to benefit more.

Additional Disclosures: A Bond IPO in India is regulated by SEBI who requires companies to follow a detailed process of issuance as well as provide a lot more details as disclosures. This provides investors with detailed information regarding the issuer than in private placements.

Higher Allocation: A Bond IPO has a pre-allocated amount of bonds to individuals in the retail and HNI segments. In case the issue is a whopping success, investors are assured of a higher (if not full) allocation of the amount they want to invest.

Transparent Pricing: As a company raises large amounts of capital via public issue, the pricing is transparent for individual investors. They don't have to conduct multiple checks through sources since the IPO has a uniform price.

Exchange Listing: Bonds in India are required by law to be listed on exchanges. This helps investors get access to regular performance updates from the company as per listing rules and arms them with better monitoring of their portfolio.

Secondary Market Liquidity: As the number of investors large for public issues, the bonds tend to have a much higher liquidity in the secondary market. This helps individuals to invest in bonds exit their investments easily and quickly versus other illiquid complex debt products.

Ease of Application: Subscribing to bonds in India is easy with an online process. Gone are the days of detailed paperwork. You can set alerts for forthcoming Bond IPOs and buy bonds online at IndiaBonds. All you need to do is add your personal details and requirements in a prefilled form.
Watch the video to learn more about Bond IPOs.
Payment Process and Allotment of Bond IPO

This is fairly straightforward for individual investors and can be done online depending on the size of your investments:

UPI - For application amounts up to INR 5 lacs, payments can be made via UPI. This stands for Unified Payments Interface (UPI) and is an instant payment system developed by the National Payments Corporation of India (NPCI), an RBI regulated entity. UPI allows you to instantly transfer money between any two parties' bank accounts.

ASBA - For application amounts more than INR 5 lacs, payments can be made via ASBA which stands for Application Supported by Blocked Amount. This is an authorization to block the application money in their bank account for subscribing to a new bond issue.
Allotment of bonds or in a public issue is mostly done based on categories mentioned below. Here only 3 and 4 are relevant for individual investors:

1. Institutional Investors - example are banks, mutual funds, insurance companies etc

2. Non-institutional Investors - example company treasuries, trusts etc

3. High-Networth Individuals (HNIs) - for applications higher than INR 10 lacs.

4. Retail Investors - for applications up to INR 10 lacs by individuals or HUF

Unlike equity IPOs, allotments are done on a first come first serve basis. So it's essential to subscribe in a Bond IPO at launch itself! Allotment in case of oversubscription is done by the Registrar on proportionate basis where retail category is given priority.

To conclude, a Debt Public Issue or Bond IPO is a very convenient and beneficial way for individuals to invest in the bond market. Topping it all off, it's now even easier to monitor and buy bonds via the convenience of IndiaBonds platform. For those who cannot wait for the next Public Issue - do not worry! Here's a wide range of secondary bond offerings on our bond market at IndiaBonds.com
Disclaimer: Investments in debt securities are subject to risks. Read all the offer related documents carefully.

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Bond IPO - Features, Benefits, Payment Process & Allotment of Debt Public Issue | IndiaBonds

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IndiaBonds explains what is bond IPO or Debt Public Issue, Features & Benefits, the payment process, allotment etc in detail. Visit the website to invest in Bond IPO online today.

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54 EC Bond - Know about Capital Gain Bonds in India | IndiaBonds

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54 EC Bond - Know about Capital Gain Bonds in India | IndiaBonds

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54EC Investment or Capital Gain Bonds help you save tax. Explore the top features or key characteristics of 54EC Bonds and start investing online with IndiaBonds today.

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Writer # Indiabonds | January 24, 2022

What are 54EC Bonds or Capital Gain Bonds

54EC or Capital Gain Bonds are investments in bonds that help you save tax. Capital Gain Bonds have been designed specifically to encourage people to invest in long-term infrastructure projects led by government-owned PSUs and in return offer investors a tax saving mechanism. The name is derived from Section 54EC of the Income Tax Act of 1961, under which investors can claim tax exemption on capital gains.

What is Capital Gains Tax?

Capital Gain is an economic concept defined as the profit earned on the sale of a capital asset (eg. Land/Building) that has been held over a period of time. The profit or gain arises when the sale price of the asset is higher than the purchase price and is calculated as the difference between the two. Investors must pay taxes in the year the capital asset is transferred which is called Capital Gains Tax.

Capital gains tax is applied only to profits earned from the capital asset sale, but not on inheritance or gift, regardless of the ownership transfer.

54EC Bonds - Eligibility and Exemption

Investment in Capital Gain Bonds is for the sole purpose of reducing tax liability that arises from sale of capital assets that are immovable like Land or Building. Hence an investor need not pay capital gains tax if the gains are invested in these bonds under the following conditions:

1) Exemption is claimed only for profits from property sales comprising land and buildings, both residential and commercial
2) Investment in Capital Gain Bonds should be within six months from the capital asset sale to avail the exemption; one can check the allotment status after investing
3) The maximum exemption and investment limit is INR 50 lacs in a financial year
4) Investment in 54EC bonds have a lock-in of 5 years from the date of investment. Investors can't sell or redeem the bonds for five years to avail the tax exemption

Issuers of 54EC or Capital Gain Bonds

Only certain Public Sector Undertakings (PSUs) are approved by the government to issue 54EC Bonds. The benefit to investors is that these issuers are government owned hence all the bonds are rated AAA (highest safety) by credit rating agencies and carry minimal risk. The following are eligible to issue Capital Gain Bonds:

REC - Rural Electrification Corporation Limited (REC 54EC Bonds)

PFC - Power Finance Corporation Limited

IRFC - Indian Railways Finance Corporation Limited

Click here to see the entire list of 54EC bonds for investment on IndiaBonds.

Key features of 54EC Bonds

In India, these bonds are a popular investment choice for mitigating long-term capital gains tax arising out of the sale of the property. Here are the main features of the bonds:

Security- 54EC Bonds are a safe and secure investment as they are issued by government-owned PSUs and carry the highest safety rating of AAA

Tenure and Issuance- These bonds have maturity or tenure of 5 years from the date of issue. The issuance date is from the date of receipt of your application itself. Bonds have a lock-in period of 5 years and are automatically redeemed at par at maturity

54EC bonds interest rates and TDS - These bonds have an interest rate of 5% per annum currently which is payable annually.

There is no TDS deduction applied on the interest rate. However, investors have to pay tax on the interest as per their own applicable slab rate under interest income for that year.

Investment Amount- Minimum investment in Capital Gain Bonds is 1 bond for INR 10,000 with a maximum limit in a financial year of up to 500 bonds for INR 50 lacs.

Holding- These bonds can be held easily in your Demat account or in physical form. We always recommend investors hold securities in Demat accounts given higher safety and convenience!

How to buy 54EC Bonds Online?

This is where IndiaBonds makes it extremely simple for you. We believe that investors in India and an NRI should have access to transparent pricing, information at hand, and the guidance of experts if required. You can invest online by yourself in 54EC Bonds

If you are unsure of where to begin, contact us, and one of our bond managers will get back to you shortly and guide you through the process.

In this digital age, it is time to explore investment options and buy bonds online from the comfort of your home in India!

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What are 54EC Bonds or Capital Gain Bonds in India? | IndiaBonds

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Writer # Indiabonds | January 24, 2022 54EC or Capital Gain Bonds are investments in bonds that help you save tax. Capital Gain Bonds have been designed specifically to encourage people to invest in long-term infrastructure projects led by government-owned PSUs and in return offer investors a tax saving mechanism.

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Bank Bonds - Bank Tier 1, Bank AT1 & Bank Tier 2 Bonds in India | IndiaBonds

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Bank Bonds - Bank Tier 1, Bank AT1 & Bank Tier 2 Bonds in India | IndiaBonds

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Bank Bonds - IndiaBonds outlines the definition of bank bonds, the various kinds of bank bonds, and the salient characteristics of Tier 1 Bank AT1 & Tier 2 bonds. Read Now

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Writer # Indiabonds | February 21, 2022

What are Bank Bonds?

Banks execute the critical function of lending to institutions and individuals to facilitate cash flow within the financial system. To maintain liquidity, they need large amounts of capital. One way of raising money is through issuing bank bonds in India.

Banks are governed by strict and sound regulations under The Banking Regulation Act, 1949. Further, they come under the supervision and regulatory framework of the apex body i.e. Reserve Bank of India. Globally too, banks need to follow the Basel-III norms which is a worldwide regulatory framework that manages financial stress, maintains market discipline and controls capital adequacy. Over and above this, international or cross-border bank transactions are also governed by law - Foreign Exchange Management Act, 1999.

Since government agencies are constantly monitoring health of banks, it makes the banking sector one of the safest and most regulated sectors. Additionally, the government also owns a majority shareholding in large number of banks in India ensuring their safety in times of stress.

A notable feature of these bonds is that they offer higher returns than bank Fixed Deposit rates, meaning you'll earn more returns on these bonds than on an FD issued by that same bank one invests in. Please read - Why your parents chose FDs and you may not want to

Bank Bonds and Seniority

Banks, like any company, need to raise money or capital for their business. Given their importance in the economy, they are regulated, need to maintain adequate cash reserves and adequate financial health ratios. Banks raise different types of capital depending on its cost and seniority. Regulators and rating agencies attach different rankings to this capital when calculating a bank's financial strength.

Below is a table of different types of Bank Capital and their seniority (i.e., who gets paid first if a bank was to fall under stress).

Types of Bank Bonds

It is important to understand that there are different types of bank bonds and before investing in them, investors must understand their individual features as well as their seniority ranking. Please remember that all Bank Bonds are not the same. There are broadly three categories of these bonds:

Bank Senior Bonds - Banks can issue senior bonds for Long Term Infrastructure and affordable housing requirements. These have to be for a minimum period of 7 years at the time of issue. Another feature of the bonds is that these are unsecured but are at par with depositors and other uninsured/unsecured creditors of the bank. Furthermore, bank senior bonds do not have any Put or Call Options and have a single bullet redemption or maturity date (no amortization).

Bank Subordinated Tier 2 Bonds - Banks issue Subordinated Tier 2 bonds to meet their Tier 2 capital requirements. These have to be for a minimum period of 5 years at the time of issue. They are unsecured and subordinated in claims to depositors, unsecured creditors and senior bonds of the bank. Bank Tier 2 bonds do not have Put Option and only have a Call Option (option for early repayment) which the bank can exercise after minimum of 5 years and after approval from Reserve Bank of India (RBI).
The most important difference of Bank Tier 2 bonds from Bank senior bonds is its loss absorption feature. If a bank is approaching or has approached a point of non-viability (PONV), then RBI can write off the principal amount outstanding on Tier 2 bonds. Essentially bondholders can see their principal written off (partially or wholly) if the bank undergoes financial stress. Hence these bonds pay higher interest rate the bank senior bonds.

Bank AT1 Bonds (Additional Tier 1) - Banks issue AT1 bonds to finance their AT1 capital requirements. These are perpetual (no final maturity), with no Put Option and a minimum 5 years Call Option that can be exercised only after RBI's approval. Bank AT1 bonds are the junior most amongst these bonds, are unsecured, subordinated even to Bank Tier 2 bonds and senior only to a bank's equity in ranking. Of course, bank depositors and other unsecured creditors rank much higher than the Bank AT1 bondholders in times of financial stress.
The loss absorption features of Bank AT1 Bonds go even a step further than the Bank Tier 2 Bonds. Here too RBI can write off the principal outstanding on AT1 Bonds if the bank is approaching or has approached point of non-viability (PONV). In addition, the principal amount of Bank AT1 Bonds can be temporarily written down or even permanently written off if the Common Equity Tier 1 (CET1) ration of the bank falls below the minimum regulatory prescribed threshold limit. Also, interest payment on Bank AT1 Bonds can only be made out of distributable income of the bank and is also subject to the bank meeting its minimum capital adequacy requirements. Any such interest foregone is non-cumulative in nature (cannot be reclaimed in future).

A quick table below that compares the different types of Bank Bonds:

Summary:
In brief, all Bank Bonds are not the same and it is important for investors to understand the structural differences between them. There is a reason why some bonds issued by the same bank pay more interest than others. In recent financial history of India, we have seen some Bank AT1s prepaid at par whilst others been written off too! Hence, knowledge is power. To know more and explore your investment options in these Bonds, you can view offerings from IndiaBonds here EXPLORE

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Buy and invest in bank bonds, AT1 bonds in India | IndiaBonds

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Writer # Indiabonds | February 21, 2022 Banks execute the critical function of lending to institutions and individuals to facilitate cash flow within the financial system. To maintain liquidity, they need large amounts of capital. One way of raising money is through issuing bank bonds in India.

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Know About The Benefits of Bond Yield Calculator | IndiaBonds

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Know About The Benefits of Bond Yield Calculator | IndiaBonds

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Find out an online bond yield calculator and how to calculate bond prices. Discover the advantages of the Bond Yield Calculator at IndiaBonds. Read Now

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Writer # Indiabonds | June 2, 2022

On investments in general, financial returns are expressed on per annum or per year basis. Simply put if you invest INR 100 and make INR 10 in one year, then your return is 10%. But if you make the same INR 10 in 2 years, then your return is just 10÷2 = 5%. Bonds typically have income streams spread over years. Hence, accounting for all those future cash flows post investment and expressing it as one single number for easy understanding is essential.

The most important terminology that accounts for all future cashflows in bonds and that one number is Bond Yield. Oxford Dictionary meaning of "yield" is to 'provide or produce something'.

Hence, Bond Yield just means what a bond produces or what financial returns you get from bonds over its time period of existence.

This is expressed as a percentage. Hence, a Bond Yield of 7.5% means you earn 7.5% returns on the bond when you hold it to its maturity (also known as Yield to Maturity).

What is a Bond Yield Calculator?

Bond Calculator is a mathematical tool that allows investors and issuers to calculate Bond Yield at a specific price or Bond Price at a desired level of yield. Calculations on bonds need various factors as input like coupon interest, coupon payment dates, maturity date, issue price, government holiday calendar for adjustments, principal repayment schedule and many more. Typically, large institutions involved in bond investments build this capability using statistical formulae, as this is their core business. For individual investors, trusts and small treasuries, it is a cumbersome task to stay on top of the thousands of bonds that are outstanding! Hence a standard Bond Calculator can assist where investors have to input all the variables to get their desired calculations.

IndiaBonds Bond Calculator

This is an innovative solution for the needs of investors. IndiaBonds Bond Calculator helps you to calculate Bond Yield or Bond Price for thousands of bonds in India. It is a complex mathematical tool that simplifies the task for investors and institutions and gets them numerical answers instantly! All the variables and formulas are already present in this calculator hence user has to just choose the bond, input a price or desired yield and enter settlement date to get answers.

The benefits of this calculator are:

Access to All - IndiaBonds' intention is to empower investors with innovative tools for their bond investments. The Bond Calculator can be accessed by anyone simply by signing up on the website. It is for everyone involved or want to learn on bonds, whether they be professionals, individual investors or keen learners.

Ease of Use - The Bond Calculator sits as a small widget on your IndiaBonds website and can be easily opened up anytime whether on mobile or desktop. The flow is very easy and logical where all you need is to enter price to calculate yield or desired yield for equivalent price. You can get calculations on 1000s of bonds and their yield to maturity in India at your fingertips and even on the move!

Available Anytime Anywhere - The bond markets rely heavily on complex cashflow spreadsheets for computing bond yields and bond prices. These are usually in office environment and very desktop/laptop oriented. Individual investors have to call their advisors or build their own spreadsheet for calculation or even for verifying prices. All this goes away in a second! No more waiting for offices to open or someone to pick up your call to give you the answers. You can do this yourself on your mobile. Bond Calculator is available to you 24/7 - anytime and anywhere!

Detailed Breakup - The Bond Calculator does not simply just tell you bond yields and bond prices. It actually gives you a detailed breakup of principal, accrued interest and total settlement amounts. It also lets you adjust settlements dates to match your cash flows. The calculator takes into account the holiday calendars as well for accuracy.

Swap and Compare Bonds - We completely understand that bond investors may need to compare different bonds to suit their investment needs. The Bond Calculator lets you compare and swap between bonds with ease. You do not have to input the bonds you are looking at again and again. Just quickly continue from the bonds you were working on once logged in the calculator. This is designed to make your life simpler!

Make Requests for Price - This calculator allows you to easily request for a bid or offer price on any particular bond of your choice with ease. While IndiaBonds has the largest inventory of bonds on offer, we are more than happy to accommodate your requests and work towards delivering your investment goals.

Connect with a Bond Manager - The Bond Calculator is designed to make decisions by investors simpler. The navigation and computation are easy to understand as we know investors like to explore things at their own leisure and time. However, in case you feel the need to speak with an expert, you can connect with our Bond Managers anytime with a click either through live chats or phone calls.

Watch the video to learn how to use Indiabonds' Bond Calculator!
The Future of Bond Investments is Here

At IndiaBonds, we aim to provide investors with tools and solutions to make their investment decisions easier. True technology revolutions are about innovative ideas to make consumer activity simpler. The Online Bond Yield Calculator is one such powerful tool for bond investors all across the country. Not only is it our mission to have a Bond in Every Hand... but also a Bond Calculator in Every Hand!
Unleash the power of the online Bond Yield Calculator now and here Disclaimer: Investments in debt securities are subject to risks. Read all the offer related documents carefully.

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What is a Bond Yield Calculator & its Benefits - IndiaBonds

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Terms you should know Minimum Investment Amount Minimum investment amount ranges between Rs. 10,000 to Rs. 10,00,000 depending on product type and underlying bonds Maturity Date - Repayment of principal of the loan at the end of tenure, along with Interest paid periodically or at the end of tenure Coupon rate - Coupon rate is the periodic interest paid by the bond issuer to the bond holder for fixed ...

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What is KYC - Know the Importance of KYC | IndiaBonds

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KYC means to know your customer, which is an effective way for an institution to confirm & thereby verify the authenticity of a customer. Visit now at IndiaBonds to learn more about KYC

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Looking for a simplified Bond Investment?

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IndiaBonds offers the best bonds online in India with competitive pricing. If you are looking for short-term or long-term investments, choose from different types; High Yield bonds, PSU bonds, Capital Gains 54ec bonds, Government bonds, Bank bonds and many more only on Indiabonds.com

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Best Online Marketplace in India for Bonds & Debentures

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Best Online Marketplace in India for Bonds & Debentures

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IndiaBonds is the first online platform in India for the retail public to purchase Bonds and Debentures. Visit now to know more about bonds and debentures.

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Note: Pursuant to the provisions of Section 193 of Income Tax Act, 1961, as amended, with effect from, 1st April 2023, TDS will be deducted @ 10% on any interest payable on any security issued by a company (i.e. securities other than securities issued by the Central Government or a State Government). The listing of products above should not be considered an endorsement or recommendation to invest. Please use your own discretion before you transact. The listed products and their price or yield are subject to availability and market cutoff times.

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