Bonds - Fixed Income

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Secure Your Income Stream

Bonds – The Foundation of a Stable Portfolio

Bonds are essential for **capital preservation** and **generating reliable fixed income**. At SK Advizors, we guide you through the diverse landscape of fixed-income instruments, ensuring your portfolio has the right balance of safety and steady returns.

Why Bonds are Crucial for Your Financial Health

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Stable Income

Provides regular fixed income via predictable coupon payments.

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Capital Safety

Safer than equities, especially with government and high-rated corporate bonds.

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Diversification

Balances portfolio risk and reduces reliance on volatile equity markets.

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Tax Efficiency

Options like tax-free bonds offer tax exemption on interest income.

Explore Available Bond Options

◉ Government Bonds (G-Secs)

The safest option, backed by the central and state governments.

◉ Corporate Bonds

Issued by companies; higher risk/return based on the issuer's credit rating.

◉ Tax-Free Bonds

Interest income is exempt from income tax, ideal for high-tax brackets.

◉ Sovereign Gold Bonds (SGBs)

Government-backed investment in gold, offering a mix of safety and growth.

Understanding Bond Risks

While generally safer than equities, bonds carry **Credit Risk** (issuer default), **Interest Rate Risk** (price volatility due to market changes), and **Liquidity Risk**. We assess your risk tolerance to recommend highly-rated and suitable bonds.

Who Should Invest in Bonds?

  • › **Retirees** seeking stable, predictable income.
  • › **Conservative investors** prioritizing capital preservation.
  • › Anyone aiming for **portfolio balance** by blending equity growth with fixed-income stability.

Bonds – FAQs

A bond is a fixed-income investment instrument where you lend money to the government, a company, or a financial institution, and in return, you receive regular interest payments (coupon) and the principal amount at maturity.

Government of India / State Governments (called G-Secs, SDLs).

Public Sector Undertakings (PSUs).

Private Companies / Corporates.

Municipal Corporations.

You invest a lump sum in a bond.

The issuer pays you interest at fixed intervals (monthly/quarterly/half-yearly/annually).

At maturity, the face value (principal) is returned to you.

Government Securities (G-Secs) – safest option.

State Development Loans (SDLs).

Corporate Bonds / Debentures.

PSU Bonds.

Tax-Free Bonds.

Perpetual Bonds.

Sovereign Gold Bonds (SGBs).

Provides regular fixed income.

Safer compared to equities.

Helps in portfolio diversification.

Some bonds (like tax-free bonds) provide tax benefits.

Many bonds are tradeable in the secondary market.

Government bonds are considered the safest, as they are backed by the government.

Corporate bonds carry more risk depending on the issuer’s credit rating. Higher returns often come with higher risk.

Interest (coupon) is paid at fixed intervals – monthly, quarterly, half-yearly, annually, or cumulative at maturity (depending on bond terms).

Yes. Interest income is taxed as per your income tax slab.

Tax-Free Bonds: The interest earned is exempt from income tax.

Government Bonds (G-Secs, SDLs, SGBs): No TDS is deducted, but income must still be declared in your ITR.

Yes. Most bonds are listed on exchanges and can be sold before maturity at prevailing market prices. However, liquidity may vary.

Credit Risk – Risk of issuer default (common in low-rated corporate bonds).

Interest Rate Risk – Bond prices fall when market interest rates rise.

Liquidity Risk – Some bonds may not have active buyers in the secondary market.

Government bonds are often available in denominations as low as ₹10,000 or even less.

Corporate bonds may require higher minimum investment, usually ₹10,000 – ₹1,00,000 depending on issuer.

Retirees seeking stable income.

Conservative investors looking for low-risk investments.

Investors who want to balance equity risk with fixed income.

Those looking for long-term safe investments like tax-free or government bonds.