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Start investing in Zero Coupon Bonds to achieve your long-term financial goals.
A zero coupon bond meaning, in simpler terms, is that it is a debt instrument wherein the issuer does not make any coupon payment but sells the bond at a substantial discount, offering a lucrative profit at maturity while redeeming the Bond.
The Zero coupon Bonds are issued at a discount rate from their face value. The differential amount between the face value and the purchase price is the investor’s return on investment.
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Investors often compare zero coupon bonds with other fixed income options so as to check in for minimal risks. The returns on zero coupon bonds are good enough at maturity and the option always remain to sell them in the secondary market, if the interest rates decline intensely.
Another significant feature of zero-coupon bonds is that interest income is free from taxation since the bonds are issued at a discount rate and get redeemed at face value. They only attract capital gains tax.
Zero-Coupon Bonds provide many advantages to investors. Zero-Coupon Bonds are an additional source to accumulate funds to meet varied domestic or professional needs. It has negligible reinvestment risk and offers fixed returns.
Zero-Coupon Bonds are a safe tool for risk-free interest income. Municipal zero-coupon bonds can help the investor to save tax on the interest income.
Zero-Coupon Bonds don’t offer regular interest. Instead, the earned interest is accumulated and paid at maturity. It helps the investor create funds to help meet their long-term goals.
Zero Coupon Bonds facilitate a reliable source for fixed returns, provided you keep your investment until maturity. A fixed return can be earned without worrying about market chaos.
Zero Coupon Bonds help you avoid reinvestment risks. With Zero-Coupon Bonds, there is no periodic coupon payment. It thus proves to be a valuable instrument for a fixed income.
Zero-Coupon Bonds don’t offer regular interest. Instead, the earned interest is accumulated and paid at maturity. It helps the investor create funds to help meet their long-term goals.
Zero Coupon Bonds facilitate a reliable source for fixed returns, provided you keep your investment until maturity. A fixed return can be earned without worrying about market chaos.
Zero Coupon Bonds help you avoid reinvestment risks. With Zero-Coupon Bonds, there is no periodic coupon payment. It thus proves to be a valuable instrument for a fixed income.
Zero coupon bonds can be bought through two types of markets: primary and secondary. And these are the steps to buy zero-coupon bonds in India:
Investing in zero-coupon securities can be a good decision for many investors. The need is to take a wise decision after consulting an investment expert.
Zero coupon securities are ideal for investors interested in long-term investment, planning for children’s education or marriage, retirement, and property purchases.
Thus, compared to other fixed-income instruments, zero coupon bonds offer a better return on maturity.
Zero coupon bonds are a type of bonds that do not pay you periodic interest. It trades at a deep discount and is useful for investors who are not in the need for an interest income at a fixed interval. Your investment in zero coupon securities is safe. Also, the returns you earn in this type of bond can be beyond your expectation.
Let us understand with an example - what is zero coupon bonds? and how it is beneficial for you. You may be required to pay Rs. 3500 to buy a zero-coupon bonds of 20 years having face value of Rs. 10000. This 6500 is your profit/benefit that you can earn by choosing to buy the above zero-coupon bonds.
Browse through our product section to learn about Zero coupon bonds India, the upcoming issues, bonds, and other news in trends. You can simultaneously explore our product section to learn more about bonds and other investment products. Do remember that a zero-coupon bonds is also termed as an accrual bond.
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A zero coupon bond is a bond where the investor receives the whole amount (Principal amount + Interest earned) only when the bond reaches its maturity. The investor does not get any interest paid during the bond’s tenure.
Zero coupon bonds are known to trade at a deep discount. Zero coupon bonds in India do not pay periodic return but offers a competitive rate of return.
Zero coupon bonds are considered comparatively a safe source for fixed income and good return on maturity.
Zero-coupon bonds help you create a corpus for long-term goals like education and marriage of children, retirement, and more.
The amount invested in zero coupon securities can be decided considering risk and reward capacity and other factors. Consulting an investment expert at BondsIndia is a good idea.
Zero coupon bond is subject to risk related to the interest rate. Some zero-coupon bonds are also inflation-indexed.
Zero coupon bonds generally have a maturity period of 10, 15, or more years.
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