Bonds & NCDs
Bonds and NCDs: what to check before investing
Credit rating, tenure, interest payment frequency and liquidity considerations explained simply.
A bond or non-convertible debenture is a borrowing instrument. The issuer agrees to pay interest at a stated rate and repay the principal at maturity, subject to its ability to do so.
Credit rating is an opinion on repayment capacity, not a guarantee. Higher stated interest usually accompanies higher credit risk.
Also consider tenure, interest payment frequency, secured or unsecured status, call options, listing and secondary-market liquidity. Prices of listed instruments move with interest rates.
This article is general educational information and not personalised investment, tax or legal advice. Eligibility, risks and product terms apply. Product suitability depends on individual circumstances.