Few financial investments create as much excitement as tax-free bonds issued by our PSUs such as REC, NHPC and NHAI.
And why should it not be? The bonds offer some really great benefits to retail investors.
Let’s look at a some of those benefits.
- They offer fixed interest like Bank Fixed Deposits, that too paid out regularly.
- The interest offered by these bonds is completely tax-free.
- They are secured. If for any reason, the company defaults, the assets of the company will be sold and your money will be returned first. They usually carry the highest safety ratings accredited by rating agencies such as India Ratings & Research, ICRA and CRISIL.
- At the end of the tenure of the bond, the investment amount or principal is returned to you in full.
- The bonds are for long term, say 10 and 15 years assuring a rate of return for that period. They are also listed on the stock exchange where they can be bought and sold anytime.