Want to invest in market-linked instruments but are scared of risk and uncertainty?
- Fixed Income Securities are the perfect market instruments that would help you!
- Fixed Income Securities, as the name suggests, are financial instruments that help organisations, including the country's government, raise money from the general public.
- In return, the organisation or the government promises to pay a fixed return regularly
- Fixed Income Securities are somewhat comparable to Fixed Deposits with Banks but earn a much better return and flexibility than bank deposits.
Want to know more about IPOs and FPOs, then
Read on…
What are Fixed Income Securities?
Fixed Income Securities are market instruments that various companies
issue to raise funds from the general public in lieu of providing fixed returns
regularly.
Some of the commonly known Fixed Income Security instruments include
Government Bonds, Corporate Bonds, Certificates of Deposits (CDʼs),
among others.
The investors like you benefit since you get a higher return than other safe
deposits, including bank deposits. Further, you are also an investor in the
direct market and a contributor to a companyʼs growth too!
Benefits
1
Assured returns
The Fixed Income Securities
guarantee assured returns in
return of the money invested,
irrespective of the companyʼs
performance. Therefore, even if
the company is not performing
well, you can be relieved that
your returns will not change.
2
Returns are higher than bank deposits
The assured returns committed by the Fixed
Income Securities are comparatively higher
than those committed by bank deposits such
as Fixed Deposits. As of January 2022, the
average return from Bank Fixed Deposits of
various types and kinds is 1.85-6.90% p.a.
(7.40% p.a. for senior citizens) The Public
Provident Fund is also considered to be a safe
investment option that pays around 7.10 per
cent return. On the other hand, Fixed Income
Securities give you a return starting around
9% p.a. and mo.
3
Market risks are hedged
Fixed Income Securities assure fixed returns
regularly or at maturity. Therefore, investors
like you can relax about the ups and downs of
the market and its impact on the returns you
receive.
4
Secured investments
Your investments in Fixed Income Securities
are quite secure under the law. How? It is
because even if the company is not
incurring profits, it is mandated to pay the
returns of your Fixed Income Security
Instrument. Even if the company goes for
liquidation, your investment would be the
first to be returned under such a liquidation
proposition in the worst-case scenario.
5
Best of two worlds
When you invest in Fixed Income Securities
instruments, you get the best of both worlds
in the literal sense. Your investments are
highly secured though you enjoy a higher
return since your investment is linked to the
market.