Where to invest Fixed Deposit or Bonds? For generations, we have been routing for fixed deposits above all the other investments. And why wouldn’t we? It is the safest investment there is for our funds to relax for a long time. Fixed deposits offer great interest rates.
There was a time when investments like fixed deposits provided a good return on investment of 8 to 9 percent. Some even more than 9 percent. This isn’t the case lately. The times have changed. The economy has been affected by a host of factors in the past few years. Fixed Deposit interests see a downward trend as we speak. A meagre return of 5-6% of FDs is not attractive anymore, to say the least, and doesn’t match up with the rising living expenses, lifestyle and inflation. As a result, we are in need of an alternative to fixed deposits. There appears to be detachment. Not in the number of investors believing in fixed deposits but the banks continuing to reduce FD rates, making fixed deposits a less redeemable choice for investors. Individuals and senior investors are severely impacted not only in terms of investments but also realise that there is no other way to park their funds for a period of ten years or more. Hence, the dilemma. To resolve your long-term investment dilemma, enter fixed-income bonds to rescue.
Let’s start with the basics of bonds. Simply put, companies issue bonds as a form of debt to raise money through investors. Making the company a borrower of an asset. The issuer is liable to pay the promised interest until maturity, then the principal amount. There are high-risk as well as low-risk bonds.
