A bond is a fixed-income instrument that represents a loan made by an investor to a borrower (typically corporate or governmental). A bond could be thought of as an I.O.U. between the lender and borrower that includes the details of the loan and its payments. Bonds are used by companies, municipalities, states, and sovereign governments to finance projects and operations. Owners of bonds are debtholders, or creditors, of the issuer. Bond details include the end date when the principal of the loan is due to be paid to the bond owner and usually include the terms for variable or fixed interest payments made by the borrower.
A mutual fund is a financial vehicle that pools assets from shareholders to invest in securities like stocks, bonds, money market instruments, and other assets. Mutual funds are operated by professional money managers, who allocate the fund's assets and attempt to produce capital gains or income for the fund's investors. A mutual fund's portfolio is structured and maintained to match the investment objectives stated in its prospectus. Mutual funds give small or individual investors access to professionally managed portfolios of equities, bonds, and other securities. Each shareholder, therefore, participates proportionally in the gains or losses of the fund. Mutual funds invest in a vast number of securities, and performance is usually tracked as the change in the total market cap of the fund—derived by the aggregating performance of the underlying investments.
Fixed deposit (FD) is one of the safest investment options through which people can earn relatively higher interest in comparison to a regular savings account. Interest is accumulated on the deposited amount over a fixed period of time. The interest rate depends on the type of lenders (public sector, private sector, or small finance banks). Senior citizens are usually offered higher interest rates. In the case of an emergency, you can easily liquidate your FD and get the funds. The tenures in fixed deposit schemes are flexible. Investors can choose the tenure according to their convenience. Once the amount has been deposited in at a specific interest rate, it remains unaffected by further changes in interest rates or market fluctuations. Thus, the returns on your deposit are assured. With fixed deposits, there are several other benefits such as loan against FD. One can avail loans of up to 90 per cent of your deposit amount at very low interest rates. Investing in tax-saving fixed deposits will fetch tax deductions. FD also provides the option for regular income. One can get the interest sum credited as per the requirements on a monthly, quarterly, or annual basis.
A recurring deposit is a special kind of term deposit offered by Indian banks which help people with regular incomes to deposit a fixed amount every month into their recurring deposit account and earn interest at the rate applicable to fixed deposits. It is similar to making fixed deposits of a certain amount in monthly instalments. This deposit matures on a specific date in the future along with all the deposits made every month. Recurring deposit schemes allow customers an opportunity to build up their savings through regular monthly deposits of a fixed sum over a fixed period of time.
In order to reduce the amount of tax that you need to pay for your capital gains, you may choose to invest the profit earned from the sale of your property on capital gain bonds that are issued by NHAI and REC under Section 54EC. Long-term capital gains (LTCG) are taxable under the Income Tax Act. However, you can get exemption on G tax under Sections 54, 54F and 54EC. While the Sections 54 and 54F pertain to purchasing a house with the capital gains made, Section 54EC allows you to claim exemption from LTCG tax on the purchase of notified government bonds.
In today’s ‘online first’ ecosystem, ‘digital gold’ has gained a lot of traction owing to the multiple benefits of investing in digital gold. First things first, it is important to learn the fact that purchasing digital gold is as genuine a process as buying gold in-person. It is simply an innovative, highly convenient and safe way to invest in gold through the digital mediums. As you might already know, gold is integral to the Indian social and cultural system; whether it is a marriage, a family event or a celebration like Diwali, gold proves to be a sought-after gift option. Unlike typical online purchase of gold, where you have to spend a specific sum of money, ‘digital gold’ investments can be made for as low as INR 100 with absolute surety of gold’s quality.
