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If you aren’t familiar with a hedge fund this is a fund that can have either long or short positions, will buy and sell undervalued securities, as well as trade options, and buy bonds online. There are plenty of reasons why you should consider investing in hedge funds as part of your investment strategy as well online investment in India.
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The term bonds has in the past been the generic term for fixed income securities in India with security (the borrower is 'bound' to repay capital). Gilts are therefore bonds. However, in recent times the term 'bond' has also been used in the name of some equity based investments, for example investment bonds issued by insurance companies. Local and foreign government bonds
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Investments are a part of a working person’s life. People invest in secondary income, invest in Bonds in India to save tax and to create a fund for retirement or lean times. When filling tax returns one needs to understand many subtle differences in different kinds of investments. A capital gain bonds, 54 EC Bonds is the difference between what you paid for an bonds investment in India and what you received when it matured or you sold it. If what you paid was more than what you received the transaction become a capital loss. You can Buy Capital gain bonds online in India as well buy 54 EC Bonds in India and Invest in 54EC Bonds online in India from BondsIndia. Capital Gain investments are basically money kept in stocks, mutual funds, bonds, real estate, precious metals, coins, fine art, and collectibles.
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Retirement income planning means starting now, regardless if you're 21 or hitting retirement age already, in order to prosper as a retiree. Sure it's best if you are twenty one, although, if you are now entering any age and have good health it's not too late. Even an extra one to two hundred a month put into savings or investment can add up fast.
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How to invest in RBI Bonds in India?10/28/2021 The bonds India markets reacted positively at RBI's Annual Policy for Fiscal Year 2010-11. The RBI's calibrated approach in exiting accommodative measures announced during the crisis period of 2008 and early 2009 was welcomed by traders as RBI announced 25 bps hike each in CRR, Repo Rate and Reverse Repo Rate, lower than the market expectations of 50bps. The RBI seemed more concerned on Inflation front and accordingly shifted its actions to inflation-led, thus, giving a balanced approach to Growth-Inflation dynamics.
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How to buy RBI Bonds in India?10/28/2021 • RBI Bonds in India announced policy rate hikes; Repo, Reverse Repo and CRR hiked to 5.25 per cent, 3.75 per cent and 6 per cent respectively, up by 25 bps.
• Invest in RBI Bonds RBI followed "baby steps" instead of "big leap" as a part of unwinding accommodative measures • RBI's M3 growth, Deposit Growth and Credit off-take projected at 17 per cent, 18 per cent and 20 per cent respectively for Fiscal Year 2010-11 • CRR hike of 25 bps drained out Rs. 12,500 crore from the system; liquidity still abundant with weekly average of above Rs. 48,000 crore • Bond Markets in India reacted positively to RBI announcements; Yields moved down. Benchmark G-Sec 6.35% 2020 settled at 8.06 per cent or Rs. 88.64; Introduction of new security G-Sec 8.20% 2022 • Buy Bonds Online in India remained buoyant throughout the week following the RBI's announcement of policy rate hikes. • Inflationary pressures (food including non-food) and overseas cues such as US Treasury Yields and Crude Oil Prices may also influence domestic bond yields. View & Recommendation: The RBI Bonds policy rate hike is unlikely to put any large impact on short-term yields due to abundance liquidity in the system. The high steepness at the shorter end (1-5 years) of the yield curve may prompt fund managers to roll-down the yields to generate extra returns provided the yield curve does not move significantly. Liquid Funds and Ultra-Short Term Bond Funds will continue to be preferred for investors having investment horizon of 1-3 months and 3-9 months respectively. Investors should avoid investing in high average maturity funds and should restrict investments to funds having average maturity up to 1 year. Short Term Income Fund will fill the void in this category.
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How to Invest in Government Bonds in India10/13/2021 Government Bonds India are supposed to be among the safest investments in India in which was why they skyrocketed in late 2008 when there was panic in the stock market. In the popular documentary series "The Ascent of Money", Niall Ferguson, a respected British economist and historian, went back into history to the times when government bonds have gone bust before and explained the reasons why it happened and the subsequent consequences. He used Argentina as an example. Starting from 1975, the Indian government had to sell a lot of bonds to raise money to fund 2 wars. The government debt became so large that people lost faith that the government could pay the debt back and nobody wanted to buy the government bonds, causing the bond yield (interest) to be very high. In order to be able to service the interest payment, the government had to keep printing more money and that caused hyper inflation. By December 2001, the government finally defaulted on their bonds. I remember hearing about the hyperinflation problem in Argentina and Indonesia years ago when it happened but I never really understood what caused it. We now hear the same thing happening in Zimbawe. To be honest, this never really bothered me before because I thought these sort of thing only happens in third world countries. What I did not realize, until I watched this documentary was that Argentina was the world's sixth richest country where every family could afford steak and a bottle of wine for dinner when this happened to them.
If it can happen to the world's sixth richest country, would it be unthinkable for it to happen to the world's richest country? The biggest buyers of India government bonds are the Chinese. The Chinese government have already started showing their concerns about the safety of their US investments. When Timothy Geithner spoke during his trip to China, he was laughed at by the Chinese students when he declared that US assets are safe. Sovereign wealth funds like Singapore's Temasek Holdings have recently dumped large holdings of US assets in favor of buying more Asian assets. Since March 2009, bond yields have been rising and the US dollar has grown weaker against most of the major currencies. You can buy government bonds online, sale government bonds online, invest government bonds online and see list of available buy government bonds through BondsIndia. The Indian government plans to borrow another 10 trillion dollars in the next 10 years. Can they afford to do so if the bond yields keep increasing? Will the US government go down the same path as Argentina and print more money which we already know will result in hyper inflation and massive devaluation of the US dollar? Bonds yields have not hit any historical highs yet and many optimists are saying it is quite normal for it to go up when the stock market is rallying as investors are simply moving money from bonds to stocks for better return. I hope they are right as I would really hate to see pension funds, who are big bond investors get hurt if history repeats itself. See Why to invest in Bonds, Invest in bonds, Bonds Investment, Bonds Online, invest in bonds online, investing in bond, bonds online, bonds investing online and how to invest in bonds in india as well how to invest in bonds.
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How to invest in RBI Bonds in India8/2/2021 Anything that comes out of the Government office is valued the most. Any job or investment opportunities try to provide an interesting opportunity for a competitive payout. History has it that every time someone needed a companion, the first prerequisite was to tick the “Government Job” off the list, as it ensured a lot of things. Most importantly, job security and holidays. It didn’t matter what you did in the office, the tag of approval was enough to garner respect among folks and relatives. Anything else was looked down upon.
Compared to private sector, competition, and job pressure within government jobs is lesser than private companies. We sure have heard stories of someone just going to work and coming home every day with no complaints. You leave your work stress at your office desk every day and get paid on the same date and bring home goodies every festival. Within no time, people working government jobs have a house of their own, a four-wheel drive, and is already planning holidays. All this plus gratuity and pension after retirement. Private companies run out of money. They might not have anything to offer after a while, leading to curtailments, but government jobs ensure you are in good hands, and it will ensure you are being provided for the day you get in. You will have a roof over you in the government quarters and first priority during health emergencies. Cost is subsidized. You save more. You get to spend more time with your family. Not only that, but you can take chances and invest in different places. Government bonds make an excellent candidate for investments because the government issues them to take care of the various needs of development. They come with assured returns and perks that we will learn in this blog.What are RBI Bonds?RBI bonds are issued by the Reserve Bank of India on the behest of the government. This kind of bonds is also known as GOI Tax saving bonds. They are among other securities issued by the GOI to bear-sized investors, such as commercial banks and companies or individuals. In the last few years, the Government has opened the gates for individual investors and corporates to invest. Government issue bonds to fulfil their developmental needs pertaining to infrastructure, operations, or to fund their new project. Bonds are debt-instruments that an investor earns fixed interests on while also preserving their capital until maturity. The interest and tenure are pre-determined. The chances of default of delay in interest payments are close to zilch because bonds are backed by the government. Government bonds are also known as G-Secs and offer an investment tenure ranging from one year to forty years. There are different types of government bonds that benefit investors and their varying needs. Types of Government Bonds 1. RBI Bonds / Floating interest Bonds RBI Floating rate bonds are true to their names. Most RBI bonds are issued with a floating rate of interest. It is a great source of investment for risk-averse investors. It is decided every six months, depending on the interest rate in the market. Fixed return is, however, not possible because the floating-rate keeps changing regularly. Things to remember while investing in RBI bonds.
Also read- How to Make Your Money Work in 2021? Disadvantages of Government Bonds
Government bonds are issued by central or the state governments for funding various government projects. There are two places investors can invest in bonds:- Primary Market and Secondary Market. RBI bonds can be bought either online or offline through private or public banks. Therefore, the purchase is not possible except at banks or entities that are authorized by the GOI. Notable services that offer the purchase of RBI bonds online.
The primary market is where bonds make their first appearance. The bond is issued straight by the issuer in the primary market. Therefore, the money goes to the issuer. There are no other parties involved. Secondary Market Once the bond is issued by the entity, it is free to run its course as per its investors needs. They can sell the bonds to interested buyers. The secondary bond market is a marketplace to ensure trading. Investors trade bonds among them. The secondary bond market consists of brokers, individual investors, and platforms that buy and sell bonds. How to Purchase RBI bonds? The graph above shows how the G-SECS have performed in the last five years. Government bonds are the best fit for retired people and those who need to keep their money for safe for a few years. Nowadays, people insist on investing in bonds for diversification and liquidity. The easiest way to purchase G-Secs is the NSE GoBid application. The bond can be purchased on the app or on their website. Log into your account and choose the number of securities you wish to buy based on your investment goals, then make the purchase using your preferred payment method. That’s a Bingo! Minimum investment amount for government bonds is ₹10,000. Government bonds have tenure of 1 to 40 years. That said, BondsIndia is India’s first blockchain based investment platform for buying and selling of bonds. Feel free to take a look at the bonds section on the website and purchase those that fit your investment goals. Bonds always have an upper hand when it comes to secured investing. We do not deal in G-Secs yet. How to apply for RBI Bonds in India? Bonds are high-security investment instruments. Making an investment in bonds is easier than before. Earlier, investors had to go through an offline process which would take a good seven-day period to finally acquire bonds. On top of that, small investors were often given the last priority due to the presence of big investors. Things have changed since the past few years. Under the non-competitive bidding method, small investors can now take part in investing in bonds. Government bonds can be purchased through a simple online process. You can buy the bond directly from the issuer on their website by uploading your KYC details and making online payments, which is what investors do in the primary market. Most investors also prefer investing in bonds in the secondary market, where bonds get traded in real time and real time price discovery comes into play. How to sell RBI Bonds in India? Bond investment are for those who wish to park their funds for a long time to take care of the needs they have planned for the future. However, no two investors are the same. Some might need their funds earlier. You can search for interested buyers through brokers or directly log on the NSE website. Selling of bonds have been made easy for investors since 2018. You sell the bonds the same way you bought them, only this time you will be selling it in the secondary market. Also read- Benefits of Bonds in your portfolio Conclusion Wherever you invest, make sure you do a thorough research about the issuer and ways you still might end up losing money even if it says that government bonds are safe and most preferred way of capital preservation. There had been cases where the Government had writer-off or cancelled bonds and the investors did end up losing all their money and most of them were individual investors, retired professionals who had put their life-savings in the bond. |