Bonds and Debentures
Bonds are debt financial instruments that both public and private sector companies use to raise funds for their operations. The government agencies, financial institutions as well as private enterprises issue these instruments to investors.
Bonds are secured by their physical assets. The holder of these bonds is the lender, while the issuer of these bonds is the borrower. The borrower can issue these bonds to the lender, only by promising to pay back the loan at a specific maturity date with a fixed interest rate.
This interest rate is generally lower than debentures because the physical assets of a company secure bonds whereas the debentures are unsecured instruments.
Debentures are also debt financial instruments like bonds. Organizations use these instruments to get funding for their daily needs.
They are generally not secured by any physical assets of the issuers, which makes them riskier than bonds. They also carry a fixed or floating interest rate. The debenture holders get first preference over shareholders of a company when it comes to the payment of interests/dividends.
The interest rate on debentures is generally higher than bonds because they are not secured by the physical assets of a company.
Benefits of Investing in Capital Gain Bonds
The interest payable on January 1 and July 1 will be linked to the then prevailing rate of interest on National Saving Certificate (NSC). Bonds will pay 35 basis points more than the rate offered on NSC
Minimum Investment Rs. 1000 and in multiple of Rs. 1000 thereof
Eligibility criteria for RBI Floating Rate Saving Bonds
You can invest in RBI FRSBs if you meet the following criteria
- An individual who is a resident of India
- An individual jointly with another individual
- A parent/guardian on behalf of a minor
- A Hindu Undivided Family (HUF)
- Charitable institutions
- Universities
Issued by Government of India
Sovereign Gold Bond Scheme
SGBs are government securities denominated in grams of gold. These are alternatives for physical gold. Investors must pay the issue price in cash, and the bonds will be redeemed in cash at maturity. The bond is issued by the Reserve Bank of India on behalf of the Government of India.
Issue Period Mar 06 - Mar 10, 2023
This has reference to the GoI notification F.No.4(6)-B(W&M)/2022 and RBI press release dated June 15, 2022 announcing that the Sovereign Gold Bond Scheme 2022-23 – Series 4 will be open for subscription from Monday, March 06, 2023 to Friday, March 10, 2023.
The Exchange is pleased to announce that BSE’s Online Bidding Platform for Sovereign Gold Bond Scheme 2022-23 – Series 4 (Tranche 63) will be open for subscription from Monday, March 06, 2023 to Friday, March 10, 2023 for trading members to subscribe to the issue for their clients.
Members will be also able to place bids for physical mode for their clients to hold SGB units in non-demat form.
This will be in addition to the existing bid entry in demat mode through IBBS system – Exchange’s existing web-based online bidding platform for IPO, Offer for Sale (OFS), Offer to buy (OTB) issues.
SOVEREIGN GOLD BOND 2022-23 : SERIES IV
Online BID: Rs. 5,561 (For investors applying online and the payment against the application is made through digital mode)
Offline BID : Rs. 5,611