If you are looking for safe investment options in the stock market, then tax-free bonds can be a good option. By investing in these, you will not have to pay tax on the returns you get and these are safe investment options. Apart from this, Gold ETF is also an attractive option.
Nowadays people are very worried about investment, but there are many options available. By using these you can get the benefit of excellent returns. Tax-free bonds have become particularly attractive right now. The popularity of bonds has increased due to expectations from the Reserve Bank of India (RBI) to reduce interest rates.
Investors can invest in these tax-free bonds on Bombay Stock Exchange (BSE) and National Stock Exchange (NSE). Currently, some tax-free bonds are performing well and have attractive yields. These bonds are safe and a great source of regular income. This bond will benefit those investors who are part of the higher tax slab.
These companies are better for investing in bonds
A total of 14 government companies, such as NHAI, IRFC, and PFC, have issued tax-free bonds in the market. These boards came between 2012 and 2016. These have been issued for 10, 15, and 20 years. These bonds are traded on the main stock exchanges. The special thing is that the interest on these is available every year and almost all of them have ‘AAA’ rating.
Bond is a secure investment
Tax-free bonds are good for investors because the income generated from them is not taxed by the government. These are run by government companies, so there is no risk of any kind in this. These are completely safe. This secures your savings. With that you are able to generate a regular income.
The following things should be kept in mind while investing in tax-free bonds of a government company…
- credit rating: Check the rating of the boards, ‘AAA’ rating is better.
- Interest Rate: Compare interest rates of different bonds.
- Investment Period: Plan for a 10, 15, or 20-year time horizon.
- Liquidity: Know the trading status of bonds in the market.
- Company Reputation: Look into the financial position and reputation of the government company.
- Investment Goal: Select bonds as per your financial goals.
