Protecting our savings from any kind of threat comes naturally to most of us and so when you decide on investing, you need to know all your options in order to invest in that avenue which is best suited for you. In this article we are going to talk about why you should consider investing in debt securities.
So, what are bonds?
In simple terms, a bond is a debt instrument issued by companies to raise funds. When you buy a bond, you are lending a certain amount to the company for a specified period of time in exchange for interest paid by the company. Throughout the tenure of that bond, you earn interest on it and at the time of maturity, the company repays the principal amount.
Why invest in bonds?
Diversifying your portfolio by investing in bonds provides a balance between risks and returns.
When you invest in bonds and decide to wait until maturity, your wealth in neither appreciated nor depreciated. It is one of the best ways to preserve your wealth. However, it is not necessary to wait until maturity, you can sell these bonds in the secondary market if you need liquidity. Unlike certain deposits, bonds do not have a lock in period. Note that this could impact your invested value depending on the prices prevailing in the secondary market.
If you are looking for an investment option which helps you save on tax you can invest in tax-free bonds. Interest on these bonds is not taxable. Apart from that, there are certain tax saving bonds that come with a minimum lock-in period of 5 years.
When we talk about safe investments, bonds certainly make it to the list. If you want to reduce your risk there are certain bonds that are backed by security or a guarantee, if you invest in these bonds the chances of losing your money (in the rare event that the issuer defaults) are much lower.
Bond investments provide a predictable stream of cash flow. You know when you are going to receive interest payments and at what rate. This can help you plan your future expenses and manage your finances in a better manner.
Interest rate of bonds is usually higher than the rate of inflation. Therefore, income from bond investments strengthens your purchasing power and work as a hedge against inflation.
Now that you are aware of the benefits of investing in bonds, let us tell you why you should invest with SMEST Capital:
SMEST is registered with SEBI which means compliance with all regulatory requirements issued by SEBI for investor protection are ensured.
Every detail you enter on their website is encrypted which means all your personal data and transactions are secure.
While trading in secondary markets the main concern is being offered a fair price for a particular bond. Smest offers the price history of each ISIN which will make it easy for you to figure the fair price range for that ISIN.
If you are someone who manages the portfolio of their family members, then SMEST is the most hassle-free portal for you. A single log-in feature at SMEST enables you to handle yours and your family’s portfolio through one single account.
You should know who you are lending your money to. Issuer analysis reports on SMEST gives you all the details related to the performance of that issuer which will make it easier for you to judge the Issuer’s quality. SMEST provides you with all the information related to each ISIN at a single spot. This includes coupon rate, maturity date, details of collateral, etc.
The Ask Smest forum is a page where you can find FAQs related to bond investments. If your question is not listed on the page, you can post it and expect to receive a revert in no time! This page also has a bond related glossary which will help you understand difficult terms used in the bond market.
SMEST also offers loyalty rewards to their clients. One gains loyalty points as one would buy, sell or make a referral.
As a trader, you should know all about what is going on in the market on a daily basis. And no, you don’t have to go through lengthy articles to keep yourself updated. The market bulletin of Smest displays all the important headlines of the day that are relevant to the debt market.
SMEST; a rare bootstrapped start up with a mission to digitize the functions of debt market and educate retail investors to encourage participation. Their team works tirelessly to improve client experience by committing to serve them even during after-hours via Ask-Smest. Their goal is to increase debt market participation especially of the unaware population of retail investors.
Harsh Punjabee, the Founder and C.E.O of Smest, “the advancement of the Fixed Income market is in a nascent stage and I believe we are at a point wherein, in the coming few years, the debt market will witness a similar transformation how the equity markets did in the 1990s. SMEST demonstrates our effort to facilitate transparency and ease in trading in fixed-income securities.”