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Fixed Income (FD's & Bonds 54EC)

Fixed Income

Fixed Deposits

Fixed Deposits are deposits where a particular sum of money is invested for a fixed duration. The duration of Fixed Deposits is flexible. It can range from 7 days to 10 years. The rate of interest for the Fixed Deposit depends on the period for which the funds are locked in.

Corporate FDs

Company Fixed Deposit (corporate FD) is a term deposit which is held over fixed period at fixed rates of interest. Company Fixed Deposits are offered by Financial and Non-Banking financial companies (NBFCs) & non-banking finance companies are governed by Companies Act 58A. The maturities of various company fixed deposits can range from a few months to a few years. Corporate fixed deposits fare better than Bank FDs as they offer a significantly higher interest rate.

Perpetual Bonds

These bonds have no maturity. The investor gets a fixed interest every year. The issuer generally has a call option to redeem the Bonds after 5-10 years. Issued by Banks and NBFC to meet the capital adequacy requirements.

Fixed Maturity Bonds/ Debentures

Have a fixed maturity period of 5-10 years after which the bonds are redeemed to the Investor. Has a coupon or interest rate fixed until maturity of a bond. Issued by PSUs, Banks, NBFCs, Corporates.

Tax-Free Bonds

These bonds are issued normally by Public Financial Institutions such as REC, NHAI, HUDCO, IIFCL and the annual interest received from these Bonds in tax-free in hands of Investor.

54EC Bond

Capital Gain Bonds

54EC bonds, or capital gains bonds, are one of the best way to save long-term capital gain tax. A long-term capital gain is any revenue that you get from the sale of an asset. The asset could be land, property or even investments.

According to the Income Tax Act, you are liable to pay tax for such gains. However you can reduce the liability of these taxes. Invest in section 54EC bonds, also commonly known as capital gain bonds, to avail tax deductions in the future. The bonds are issued as per the provisions of the section 54EC of the IT Act & bonds are AAA rated.