Benefits of NCD
We wanted to take a moment to share some valuable information about an investment option that could potentially enhance your portfolio—Non-Convertible Debentures (NCDs).
- Stable and Predictable Returns: NCDs provide a fixed rate of interest, offering you a steady and predictable income stream. This makes them an attractive choice for those seeking consistent returns.
- Higher Returns, Lower Risk: Compared to traditional fixed deposits, NCDs often offer higher interest rates. Additionally, their lower correlation with the stock market provides a level of stability during market fluctuations.
- Diversify Your Portfolio: Including NCDs in your investment mix adds diversity. This can be beneficial, as NCDs, being debt instruments, may behave differently than stocks, providing balance to your portfolio.
- Choose Your Investment Horizon: NCDs come with various tenure options, allowing you to select a maturity period that aligns with your financial goals. This flexibility empowers you to tailor your investments to your specific needs.
- Liquidity and Tradeability: While not as liquid as stocks, NCDs can be traded on stock exchanges, giving you the option to sell your holdings if needed before maturity.
- Credit Rating for Safety: NCDs are often rated by credit agencies, indicating the issuer’s creditworthiness. Higher-rated NCDs are considered lower risk, providing an added layer of security.
- Potential Tax Benefits: Depending on your tax situation, some NCDs may offer tax-saving options or exemptions on the interest earned.
- Security and Stability: Backed by the issuer’s commitment to repay the principal and interest, NCDs provide a sense of security and stability.
It’s important to note that, like any investment, NCDs come with risks. These include interest rate risk, credit risk, and market price risk. Before considering NCDs, it’s crucial to understand their terms and assess your own risk tolerance.
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