Which is better to invest in bonds or fixed deposits ?
Many investors remain confused while choosing between fixed deposits and bonds. The reason for this is that they do not have enough knowledge about these two and remain confused about them. In such a situation, you should not take any decision in haste. You should carefully study the benefits and features of both while choosing either of the two. Along with this, investment option should be selected based on your financial goal. You can understand better about them, so through this article we are going to give you information about investing in bonds and fixed deposits, so that you will understand which of these two investment options will be good for you. .
Difference between investing in bonds and fixed deposits
Fixed deposit is an investment option in which money is deposited for a fixed period of time at a fixed interest rate. Investing in bonds is done by depositing a fixed amount for a specified period. But the interest rates of FDs are much higher as compared to investments made in bonds. However, investing in bonds offers more tax benefits than fixed deposits.
Bond investment and FD interest rates
The rate of interest is an important factor while evaluating any investment option, as you are able to meet your financial goals based on the returns you get from any investment instrument. If you are just looking for an option that gives better returns or regular income, then you should opt for FDs. It pays interest on monthly, quarterly or annual basis. But if you want your money to grow, you can opt for investing in bonds. The interest earned in this is reinvested and paid after the maturity period. In this your money grows at a faster rate.
Other Key Differences:
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NOTE: The information is being presented without consideration of any specific investor’s investment objectives, risk tolerance or financial circumstances and may not be suitable for all investors. Past performance is not indicative of future results. Investing involves risk, including potential loss of principal.