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How to invest in NCD/ Corporate Bonds in India? Is there any online platform like Groww or Zerodha?
Yes, there are online platforms in India where you can invest in Non-Convertible Debentures (NCDs) and corporate bonds. While platforms like Groww or Zerodha primarily focus on equity and mutual fund investments, there are other platforms specifically designed for bond investments. Some of these plaRead more
Yes, there are online platforms in India where you can invest in Non-Convertible Debentures (NCDs) and corporate bonds. While platforms like Groww or Zerodha primarily focus on equity and mutual fund investments, there are other platforms specifically designed for bond investments. Some of these platforms include:
1. **NSE goBID**: This is an electronic platform provided by the National Stock Exchange (NSE) for retail investors to invest in non-competitive bidding of Government of India Securities and Treasury Bills. However, it may not offer corporate bonds.
2. **BSE Bond**: The Bombay Stock Exchange (BSE) also offers an electronic platform for investors to trade in debt securities including corporate bonds.
3. **NCDEx**: The National Commodity & Derivatives Exchange Limited (NCDEX) provides an online platform for trading in corporate bonds and debentures.
4. **Mutual Fund Utilities**: Some mutual fund utilities like CAMS and Karvy offer facilities for investing in corporate bonds through mutual fund schemes.
5. **Direct Investment through Banks**: Many banks provide the facility to invest directly in corporate bonds and NCDs. You can approach your bank’s investment division for more information.
Before investing in NCDs or corporate bonds, it’s crucial to consider factors such as credit rating, issuer’s financial health, interest rates, maturity period, and liquidity. Additionally, make sure to do thorough research or consult a financial advisor to understand the risks associated with bond investments.
See lessIs it safe to invest in Bonds in india?
Investing in bonds in India can be considered relatively safe compared to other forms of investment such as equities, provided you understand the risks involved and make informed decisions. Here are some factors to consider regarding the safety of investing in bonds in India: 1. **Credit Rating**: BRead more
Investing in bonds in India can be considered relatively safe compared to other forms of investment such as equities, provided you understand the risks involved and make informed decisions. Here are some factors to consider regarding the safety of investing in bonds in India:
1. **Credit Rating**: Bonds are typically rated by credit rating agencies based on the issuer’s creditworthiness. Higher-rated bonds (such as AAA or AA) are considered safer investments compared to lower-rated bonds. Before investing, check the credit rating of the bond to assess the level of risk.
2. **Issuer’s Financial Health**: Assess the financial health of the issuer before investing in their bonds. This includes examining their revenue, profitability, debt levels, and overall stability. Companies with strong financials are generally considered safer bets for bond investments.
3. **Interest Rate Risk**: Bond prices are inversely related to interest rates. When interest rates rise, bond prices tend to fall, and vice versa. Consider the prevailing interest rate environment and its potential impact on bond prices before investing.
4. **Liquidity**: Unlike stocks, bonds may not be as liquid, meaning they may not be easily bought or sold in the market. Ensure that you are comfortable with the liquidity of the bond you are investing in, especially if you may need to sell it before maturity.
5. **Diversification**: Diversifying your bond portfolio across different issuers, sectors, and maturities can help mitigate risk. This reduces the impact of a default by any single issuer on your overall investment portfolio.
6. **Government Bonds**: Government bonds, particularly those issued by the Government of India, are generally considered safer due to the government’s ability to raise funds and its lower risk of default compared to corporate bonds.
While investing in bonds can be relatively safe, it’s essential to understand that all investments carry some level of risk. It’s crucial to conduct thorough research, assess your risk tolerance, and consider seeking advice from a financial advisor before making any investment decisions.
See lessHow much interest we can get from NCD/Bond investment?
The amount of interest you can earn from NCDs (Non-Convertible Debentures) or bonds depends on several factors: 1. **Coupon Rate**: This is the fixed annual interest rate that the issuer agrees to pay on the face value of the bond. For example, if a bond has a face value of ₹10,000 and a coupon rateRead more
The amount of interest you can earn from NCDs (Non-Convertible Debentures) or bonds depends on several factors:
1. **Coupon Rate**: This is the fixed annual interest rate that the issuer agrees to pay on the face value of the bond. For example, if a bond has a face value of ₹10,000 and a coupon rate of 8%, you would receive ₹800 annually as interest income.
2. **Face Value**: This is the nominal value of the bond, typically ₹1,000 or ₹10,000 per unit. The interest payments are calculated based on this face value.
3. **Maturity Period**: The duration for which you hold the bond affects the total interest earned. Longer maturity periods typically offer higher coupon rates but may also involve greater risk.
4. **Tax Implications**: The interest income from NCDs or bonds is taxable as per your income tax slab. Consider the tax implications while calculating your net returns.
5. **Credit Rating and Risk**: Bonds with higher credit ratings usually offer lower interest rates compared to riskier bonds. However, they provide more security against default.
6. **Market Conditions**: Interest rates prevailing in the market at the time of bond issuance can affect the coupon rate. If interest rates rise after you purchase a bond, the fixed interest payments may become less attractive compared to newer bonds offering higher rates.
It’s essential to carefully evaluate the terms of the bond, including the coupon rate, maturity period, credit rating, and market conditions, to estimate the interest income you can expect from your NCD or bond investment. Additionally, consider diversifying your bond portfolio to manage risk and optimize returns.
See lessWhat are some books one must read in order to start intraday trading?
If you're looking to start intraday trading, it's essential to gain a thorough understanding of the principles, strategies, and psychology involved in this form of trading. Here are some books that can provide valuable insights: 1. **"Day Trading and Swing Trading the Currency Market: Technical andRead more
If you’re looking to start intraday trading, it’s essential to gain a thorough understanding of the principles, strategies, and psychology involved in this form of trading. Here are some books that can provide valuable insights:
1. **”Day Trading and Swing Trading the Currency Market: Technical and Fundamental Strategies to Profit from Market Moves” by Kathy Lien**: This book offers a comprehensive overview of both day trading and swing trading strategies in the forex market. It covers technical analysis, fundamental analysis, and practical trading techniques.
2. **”How to Day Trade for a Living: A Beginner’s Guide to Trading Tools and Tactics, Money Management, Discipline and Trading Psychology” by Andrew Aziz**: This book provides practical guidance on day trading, including technical analysis tools, risk management strategies, and the psychological aspects of trading.
3. **”Japanese Candlestick Charting Techniques” by Steve Nison**: Understanding candlestick patterns is crucial for intraday traders. This book by Steve Nison is considered the definitive guide to Japanese candlestick charting techniques, which can help traders identify trends and reversals in the market.
4. **”The New Trading for a Living: Psychology, Discipline, Trading Tools and Systems, Risk Control, and Trade Management” by Dr. Alexander Elder**: Dr. Elder discusses the psychological aspects of trading, emphasizing the importance of discipline, risk management, and developing a trading plan. This book provides practical advice for traders at all skill levels.
5. **”Technical Analysis of the Financial Markets: A Comprehensive Guide to Trading Methods and Applications” by John J. Murphy**: This book is a comprehensive guide to technical analysis, covering various chart patterns, indicators, and trading strategies that are relevant for intraday trading.
6. **”Market Wizards: Interviews with Top Traders” by Jack D. Schwager**: While not specifically focused on intraday trading, this book offers valuable insights from some of the world’s most successful traders. Reading about their experiences and strategies can provide inspiration and new ideas for your own trading approach.
Remember that successful trading requires continuous learning, practice, and the ability to adapt to changing market conditions. These books can serve as valuable resources to help you build a solid foundation and improve your skills as an intraday trader. However, always remember to validate strategies in real market conditions and consider seeking guidance from experienced traders or mentors.
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