Bonds and securities

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Bonds and securities

Types of Bonds and Securities

Invest in an array of Government Bonds and Securities through HDFC Bank to save on long-term capital gains tax, achieve returns that beat inflation, and invest in risk-free securities. Utilise your HDFC Bank Account to conveniently purchase Section 54EC Capital Gains Bonds, 8% Savings Bonds, and Inflation Indexed National Savings Securities Cumulative. Read on to know more about the types of Bonds and Securities

RBI Floating Rate Savings Bond 2020 (Taxable)

  • Floating rate of interest with a half yearly interest payout.
  • 100%, government-backed and risk-free investment.
  • Minimum investment of ₹1,000, with no maximum investment limit.
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Bonds and securities

Sec 54 EC - Capital Gains Bonds

  • Save on Long-term Capital Gains Tax.
  • Earn an attractive interest rate of 6% p.a.
  • Invest a minimum of ₹10,000 and up to ₹50 lakh in a financial year.
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Bonds and securities

Sovereign Gold Bonds

  • Zero risk of handling physical gold.
  • Earn assured interest @ 2.5 % of the investment amount.
  • Permitted minimum investment of 1 gram and up to 4 KG by Individual/HUF and 20 KG by Trusts/Universities/Charitable institutions per financial year.
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Bonds and securities

More About Fixed-Income Assets

  • Features of Bonds and Securities
  • Bonds and Securities share several key features that attract investors seeking stable returns and portfolio diversification. Firstly, bonds offer fixed or variable interest payments over a specified period, providing predictable income streams. They are debt instruments where investors lend money to governments or corporations in exchange for regular interest payments and repayment of principal at maturity. Securities, as a broader category, include bonds along with Stocks, Mutual Funds, ETFs, and Derivatives, offering varying levels of risk and potential returns. Investors choose Bonds and Securities based on their financial objectives, risk tolerance levels, and the economic environment, aiming to strike a balance between income generation and capital preservation.
  • Benefits of Investing in Bonds and Securities
  • Bonds and Securities offer several benefits to investors. Firstly, they provide a reliable source of income through regular interest payments or dividends, making them attractive for income-seeking investors. Secondly, they can act as a hedging tool against market volatility, offering stability and diversification within investment portfolios. Bonds, in particular, are known for their lower risk compared to stocks, providing principal protection and predictable returns. Securities, including stocks and bonds, also offer potential capital appreciation over time, depending on market conditions. Additionally, they provide avenues for investors to align their investments with specific financial goals, such as retirement planning or wealth preservation.
  • Documents Required for Investing in Bonds and Securities
  • The documents required for investing in bonds and securities typically include:
  • KYC Documents: Identity proof such as Aadhaar card, passport, PAN card, driver’s license, or voter ID, and address proof like utility bills or Aadhaar card.
  • Income Proof: Salary slips, bank statements, or income tax returns to verify financial status.
  • Bank Account Details: Linked bank account details for transactions.
  • Risk Profiling: Some investments may require completion of risk profiling documents to assess investor risk tolerance.
  • Application Forms: Specific forms provided by the issuer or brokerage firm for purchase or redemption of securities.
  • Most Important Terms and Conditions
  • *The Most Important Terms and Conditions for each of our banking offerings features all the specific terms and conditions that govern their use. You must go through it thoroughly to fully understand the terms and conditions applicable to any banking product you choose.

Frequently Asked Questions

Bonds and Securities are financial instruments issued by governments, corporations, and other businesses and entities to raise capital. Bonds represent debt obligations where the issuer borrows funds from investors and promises to repay the principal amount along with periodic interest payments over a specified time frame. They are considered fixed-income investments because they offer a predictable income stream. 

Securities, on the other hand, encompass a broader range of financial assets, including stocks, bonds, derivatives, and other investments traded in financial markets. Investors choose bonds and securities based on factors like risk tolerance, income needs, and investment goals within their financial portfolios.

Securities encompass a variety of financial instruments traded in markets worldwide. Key types include:

  • Stocks (Equities): Represent ownership in a company, offering potential dividends and capital gains.
  • Bonds: Debt securities where issuers borrow funds from investors and promise periodic interest payments and repayment of principal.
  • Mutual Funds: Pools of money from multiple investors invested in Stocks, Bonds, or/and other assets, managed by professionals.
  • Exchange-Traded Funds (ETFs): Similar to Mutual Funds but traded on stock exchanges, offering diversified investments.
  • Derivatives: Contracts deriving value from underlying assets, used for hedging or speculative purposes.
  • Options and Futures: Contracts giving traders the right/obligation to buy or sell assets at a predetermined price and time.

Stocks and Securities are two terms often used interchangeably, but they refer to different types of financial instruments. Stocks, specifically referred to as equities, represent ownership in a company, entitling shareholders to dividends and voting rights. On the other hand, securities encompass a broader category that includes Stocks, Bonds, Mutual Funds, ETFs, Derivatives, and other tradable financial assets. 

While Stocks are a subset of securities, the term "securities" covers a wider range of investments that can include both equity (stocks) and debt (bonds) instruments. Investors choose between stocks and other securities based on their financial goals, risk tolerance, and market outlook.