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• TERM bonds are bonds from the same issue that share the same maturity dates. Term bonds that have a call FEATURE can be redeemed at an earlier date than the other issued bonds. A call feature, or call provision, is an agreement that bond issuers MAKE with buyers. This agreement is called an "indenture," which is the schedule and the price of redemptions, PLUS the maturity dates.
• Some corporate and municipal bonds are EXAMPLES of term bonds that have 10-year call features.

Municipal BONDS are Debt SECURITIES issued by state and LOCAL governments, and SPECIAL districts and COUNTIES.

Municipal Bonds are Debt securities issued by state and local governments, and special districts and counties.

Non-convertible debentures (NCDs) are debt INSTRUMENTS with a fixed tenure ISSUED by COMPANIES to raise money for business purposes. Unlike convertible debentures, NCDs can't be CONVERTED into EQUITY shares of the issuing company at a future date.

Non-convertible debentures (NCDs) are debt instruments with a fixed tenure issued by companies to raise money for business purposes. Unlike convertible debentures, NCDs can't be converted into equity shares of the issuing company at a future date.

There can be two TYPES of income from NCDs:

1. First is the interest income from a NCD and tax treatment is exactly similar to any other interest income such as interest income from FDs. In other words, interest income from NCDs will be subjected to tax at NORMAL rates by INCLUDING it in 'Income from other sources'.
2. Next is capital GAINS. If you decide to sell the NCDs on the stock exchange, capital gains can also arise. If NCDs are SOLD with in a period of 12 months .

There can be two types of income from NCDs:

NCDs VS. Corporate fixed deposits: Yes, of course NCDs are better than COMPANY FDs. Though usually the interest RATES on NCDs and company FDs are more or less the same, what tilts the balance in favour of NCDs is the risk-return factor. Furthermore, there is also potential to earn capital appreciation from NCDs if there is a downward movement in the interest rates.

NCDs vs. BANK fixed deposits: Again, NCD is better than a bank FD because the interest differential is quite significant .

NCDs vs. Corporate fixed deposits: Yes, of course NCDs are better than company FDs. Though usually the interest rates on NCDs and company FDs are more or less the same, what tilts the balance in favour of NCDs is the risk-return factor. Furthermore, there is also potential to earn capital appreciation from NCDs if there is a downward movement in the interest rates.

NCDs vs. Bank fixed deposits: Again, NCD is better than a bank FD because the interest differential is quite significant .

A company can issue bonds just as it can issue stock. Large CORPORATIONS have a lot of flexibility as to how much debt they can issue: the limit is whatever the market will BEAR. Generally, a short-term corporate bond has a maturity of LESS than five years, intermediate is five to 12 years and long term is more than 12 years.

Corporate bonds are characterized by higher YIELDS because there is a higher RISK of a company defaulting than a government.

A company can issue bonds just as it can issue stock. Large corporations have a lot of flexibility as to how much debt they can issue: the limit is whatever the market will bear. Generally, a short-term corporate bond has a maturity of less than five years, intermediate is five to 12 years and long term is more than 12 years.

Corporate bonds are characterized by higher yields because there is a higher risk of a company defaulting than a government.

Maximum benefit to an INVESTOR SHALL be RS. 20,000/- under SECTION 80CCF of the Income Tax Act, 1961.

Maximum benefit to an investor shall be Rs. 20,000/- under section 80CCF of the Income Tax Act, 1961.

Bond is a DEBT instrument issued for a PERIOD of more than one year with the purpose of raising CAPITAL by borrowing. The Federal government, states, cities, corporations, and many other types of INSTITUTIONS sell bonds. Generally, a bond is a promise to repay the principal along with interest (coupons) on a specified date (maturity). Some bonds do not pay interest, but all bonds require a repayment of principal. When an investor buys a bond, he/she becomes a creditor of the ISSUER.

Bond is a debt instrument issued for a period of more than one year with the purpose of raising capital by borrowing. The Federal government, states, cities, corporations, and many other types of institutions sell bonds. Generally, a bond is a promise to repay the principal along with interest (coupons) on a specified date (maturity). Some bonds do not pay interest, but all bonds require a repayment of principal. When an investor buys a bond, he/she becomes a creditor of the issuer.

The interest received on these bonds shall be treated as INCOME from any other source and shall form part of the TOTAL income of the assessee in that FINANCIAL year in which they are received.

The interest received on these bonds shall be treated as income from any other source and shall form part of the total income of the assessee in that financial year in which they are received.

Angel BONDS are investment-grade bonds that pay a lower interest rate because of the ISSUING company's high credit rating. Angel bonds are the opposite of fallen angels, which are bonds that have been given a "junk" rating and are therefore much more risky.

An investment-grade bond is rated at minimum "BBB" by S&P and Fitch, and "BAA" by Moody's. If the company's ability to pay BACK the bond's principal is reduced, the bond rating may FALL below investment-grade.

Angel bonds are investment-grade bonds that pay a lower interest rate because of the issuing company's high credit rating. Angel bonds are the opposite of fallen angels, which are bonds that have been given a "junk" rating and are therefore much more risky.

An investment-grade bond is rated at minimum "BBB" by S&P and Fitch, and "Baa" by Moody's. If the company's ability to pay back the bond's principal is reduced, the bond rating may fall below investment-grade.

PAN CARD is MANDATORY for SUBSCRIBING to these BONDS.

PAN card is mandatory for subscribing to these bonds.

Companies will commence the public ISSUE of NCDs for a SPECIFIED PERIOD of time. After that the NCDs are LISTED on the stock exchange. INVESTORS who are interested in investing in the NCDs can purchase the NCDs from the open market through registered brokers.

Companies will commence the public issue of NCDs for a specified period of time. After that the NCDs are listed on the stock exchange. Investors who are interested in investing in the NCDs can purchase the NCDs from the open market through registered brokers.

No, the INTEREST received in these BONDS is not tax FREE. The investor is liable to PAY tax on the interest received.

No, the interest received in these bonds is not tax free. The investor is liable to pay tax on the interest received.

The allotment SHALL be MADE for the sum applied, however the BENEFIT under SECTION 80CCF may only be AVAILED for a maximum sum of Rs. 20,000/-.

The allotment shall be made for the sum applied, however the benefit under section 80CCF may only be availed for a maximum sum of Rs. 20,000/-.

Only RESIDENT INDIAN individuals (MAJOR) and HUF can invest in these BONDS.

Only Resident Indian individuals (Major) and HUF can invest in these bonds.

An amortized BOND is a financial certificate that has been reduced in value for records on ACCOUNTING statements. An amortized bond is TREATED as an asset, with the discount amount being amortized to interest expense over the life of the bond. If a bond is issued at a discount - that is, offered for sale below its PAR (face value) - the discount must either be treated as an expense or amortized as an asset.

Amortization is an accounting method that gradually and SYSTEMATICALLY.

An amortized bond is a financial certificate that has been reduced in value for records on accounting statements. An amortized bond is treated as an asset, with the discount amount being amortized to interest expense over the life of the bond. If a bond is issued at a discount - that is, offered for sale below its par (face value) - the discount must either be treated as an expense or amortized as an asset.

Amortization is an accounting method that gradually and systematically.

Yes, FD can be CLOSED before the ORIGINAL term of the FD. In the event of the Fixed Deposit being closed before completing the original term of the deposit, interest will be paid at the RATE applicable on the date of deposit, for the period for which the deposit has REMAINED with the BANK. In case of premature withdrawal the deposit may be subject to penal rate of interest as prescribed by the Bank on the date of deposit. 

Yes, FD can be closed before the original term of the FD. In the event of the Fixed Deposit being closed before completing the original term of the deposit, interest will be paid at the rate applicable on the date of deposit, for the period for which the deposit has remained with the Bank. In case of premature withdrawal the deposit may be subject to penal rate of interest as prescribed by the Bank on the date of deposit. 

Yes, NRIS can INVEST in NCDs PROVIDED the COMPANY issuing NCDs ALLOWS them to invest in it. 

Yes, NRIs can invest in NCDs provided the company issuing NCDs allows them to invest in it. 

The tax EXEMPTION BENEFIT under Sec 80CCF on a SUM of Rs. 20,000/- is over and above Rs. 1,00,000/- benefit under SECTION 80C, 80CCC and 80CCD. 

The tax exemption benefit under Sec 80CCF on a sum of Rs. 20,000/- is over and above Rs. 1,00,000/- benefit under section 80C, 80CCC and 80CCD. 

The INTEREST shall be credited to the respective Bank account registered with the demat account through ECS on the due date for interest PAYMENT, and -if the due date is a public holiday then the NEXT WORKING date. 

The interest shall be credited to the respective Bank account registered with the demat account through ECS on the due date for interest payment, and -if the due date is a public holiday then the next working date. 

No TDS shall be deducted on the INTEREST received as these bonds are issued COMPULSORILY in demat mode and shall be listed on NSE & BSE.

No TDS shall be deducted on the interest received as these bonds are issued Compulsorily in demat mode and shall be listed on NSE & BSE.

A MINOR is not ELIGIBLE to APPLY for SUBSCRIPTION to these BONDS.

A minor is not eligible to apply for subscription to these bonds.

Following are the differences between an NCD and an FD:

1. LIQUIDITY: In contrast to a NCD, FD can't be sold in the market. As NCDs are LISTED on a stock exchange, you can SELL them any time you want. HOWEVER, bank FDs are also highly liquid and can be encashed before maturity with minor penal charges.
2. Safety: While NCDs are secured debt, corporate FDs are altogether unsecured and bank FDs are secured to the extent of Rs one lakh only.
3. Taxation.

Following are the differences between an NCD and an FD:

Issued by a CORPORATION during a restructuring phase, an adjustment bond is given to the bondholders of an OUTSTANDING bond issue prior to the restructuring. The debt obligation is consolidated and transferred from the outstanding bond issue to the adjustment bond. This process is effectively a recapitalization of the COMPANY's outstanding debt obligations, which is accomplished by adjusting the terms (such as interest RATES and LENGTHS to maturity) to increase the likelihood that the company.

Issued by a corporation during a restructuring phase, an adjustment bond is given to the bondholders of an outstanding bond issue prior to the restructuring. The debt obligation is consolidated and transferred from the outstanding bond issue to the adjustment bond. This process is effectively a recapitalization of the company's outstanding debt obligations, which is accomplished by adjusting the terms (such as interest rates and lengths to maturity) to increase the likelihood that the company.

The TENURE of these BONDS SHALL be 10 years and the bonds have a lock-in of 5 years.

The Tenure of these bonds shall be 10 years and the bonds have a lock-in of 5 years.

Different type of BONDS BASED on their issuers are:-

1. Corporate Bonds .
2. Convertible Bonds.
3. Callable Bonds.
4. Term Bonds.
5. Amortized Bonds.
6. ADJUSTMENT Bonds.
7. Junk Bonds.
8. Angel Bonds.

Different type of Bonds based on their issuers are:-

You cannot AVAIL of any loan pledging these bonds in the first 5 YEARS. Thereafter, these bonds may be pledged to avail of LOANS.

You cannot avail of any loan pledging these bonds in the first 5 years. Thereafter, these bonds may be pledged to avail of loans.

A convertible bond may be redeemed for a predetermined amount of the company's EQUITY at certain TIMES during its life, usually at the discretion of the bondholder. Convertibles are sometimes called "CVs."

Issuing convertible bonds is one way for a company to minimize negative INVESTOR interpretation of its corporate actions. For example, if an ALREADY public company chooses to issue stock, the market usually INTERPRETS this as a sign that the company's share price.

A convertible bond may be redeemed for a predetermined amount of the company's equity at certain times during its life, usually at the discretion of the bondholder. Convertibles are sometimes called "CVs."

Issuing convertible bonds is one way for a company to minimize negative investor interpretation of its corporate actions. For example, if an already public company chooses to issue stock, the market usually interprets this as a sign that the company's share price.

Yes, because all the recent ISSUES of NCDS were COMPULSORILY in the dematerialized form.

Yes, because all the recent issues of NCDs were compulsorily in the dematerialized form.

In CASE of joint application the interest SHALL be PAID to the account of the FIRST APPLICANT only.

In case of joint application the interest shall be paid to the account of the first applicant only.

Yes APPLICATION can be made in JOINT names with a maximum of three APPLICANTS, however the demat account shall also be held in the joint names and order of APPLICANT shall be the same as APPEARING in the demat account. In case of application made in joint names, the tax benefit shall only be availed by the first applicant.

Yes application can be made in joint names with a maximum of three applicants, however the demat account shall also be held in the joint names and order of applicant shall be the same as appearing in the demat account. In case of application made in joint names, the tax benefit shall only be availed by the first applicant.

Yes, quoting PAN NUMBER in the NCD application form is COMPULSORY IRRESPECTIVE of the amount involved as per SEBI guidelines.

Yes, quoting PAN number in the NCD application form is compulsory irrespective of the amount involved as per SEBI guidelines.

Callable bonds, also known as "redeemable bonds," can be redeemed by the issuer prior to maturity. Usually a premium is paid to the BOND owner when the bond is called.

The main cause of a call is a DECLINE in interest rates. If interest rates have declined SINCE a company first issued the bonds, it will likely want to refinance this DEBT at a lower RATE. In this case, the company will call its current bonds and reissue new, lower-interest bonds to save money.

Callable bonds, also known as "redeemable bonds," can be redeemed by the issuer prior to maturity. Usually a premium is paid to the bond owner when the bond is called.

The main cause of a call is a decline in interest rates. If interest rates have declined since a company first issued the bonds, it will likely want to refinance this debt at a lower rate. In this case, the company will call its current bonds and reissue new, lower-interest bonds to save money.

A junk bond, also KNOWN as a "high-yield bond" or "speculative bond," is a bond rated "BB" or lower because of its high default risk. Junk bonds typically offer INTEREST RATES three to four percentage points higher than SAFER GOVERNMENT issues.

A junk bond, also known as a "high-yield bond" or "speculative bond," is a bond rated "BB" or lower because of its high default risk. Junk bonds typically offer interest rates three to four percentage points higher than safer government issues.

Nonconvertible debentures are unsecured BONDS that cannot be converted to company equity or stock. Nonconvertible debentures usually have higher interest rates than CONVERTIBLE debentures. A fixed deposit is an arrangement with a bank where a DEPOSITOR PLACES money in the bank and is paid a regular fixed profit.

Debentures are long-term financial instruments which acknowledge a debt obligation towards the issuer. Some debentures have a FEATURE of convertibility into shares.

Nonconvertible debentures are unsecured bonds that cannot be converted to company equity or stock. Nonconvertible debentures usually have higher interest rates than convertible debentures. A fixed deposit is an arrangement with a bank where a depositor places money in the bank and is paid a regular fixed profit.

Debentures are long-term financial instruments which acknowledge a debt obligation towards the issuer. Some debentures have a feature of convertibility into shares.

The entities like LIC, IDFC, IFCI and other NBFCs which are classified as Infrastructure Finance Companies by RBI SHALL be allowed to issue these LONG TERM infrastructure bonds.

The entities like LIC, IDFC, IFCI and other NBFCs which are classified as Infrastructure Finance Companies by RBI shall be allowed to issue these long term infrastructure bonds.