We have all traded from a very young age, not conscious about the fact that we were in fact doing a very serious business. The bright sticker packages that comes with candies and the Pokémon cards that we exchanged with our friends they were all a form of trade, but what did we do when we owed a person a sticker that we didn’t have, we wrote a”will” that the sticker that was traded was to be exchanged for the purple sticker of baloo but since Rohan couldn’t bring it he is supposed to give it on Friday. This is exactly what a bond is.
What is a bond?
According to Investopedia, A bond is a fixed income instrument that represents a loan made by an investor to borrower. A bond could be thought of as an I.O.U. (I Owe You) between the lender and borrower that includes the details of the loan and its payments.
A bond has an end date when the principal amount of the loan is due to be paid. Bonds are used by companies, municipalities, states, and sovereign governments to finance projects and operations. Owners of bonds are debt holders, or creditors, of the issuer.
How does a Bond work?
How Bonds Work
When companies or other entities need to raise money to finance their needs they may issue bonds directly to investors. This bond includes the terms of the loan, interest payments that will be made, and the time at which the loan must be paid back. The interest payment is part of the return that bondholders earn for loaning their funds to the issuer. The face value of the bond is what will be paid back to the borrower once the bond matures.
How to invest in Bonds
To invest in bonds after you open a brokerage account from any trusted brokerages like GOODWILL, you can go on to buy individual bonds for your portfolio according to your desired maturation period. But before you do so check the rate of the bond and get an idea of the interest amount that you will be getting, after that is done you can directly place your order and be done with the whole business
Investment in Bonds is done online and through authorized Agents. Investments in Govt. bonds are usually preferred because of the safety and reasonable returns that they provide. Investments in Company deposits, debentures, Commercial paper of companies have their own element of risks. One has to be extremely careful while investing in private companies-be it FDs, CPs, Debentures.
For more information on bonds and how to go about it contact Goodwill at admin@gwcindia.in or at +91 – 44 – 4020 5050.
Bond with Goodwill because BONDS takes you places you never even dream it of.
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