Bonds are also called fixed income securities because borrowers agree to repay a fixed amount of principal at a predetermined maturity date and pay a fixed amount of interest over a specified period of time. Bonds can provide current income for conservative investors and at times capital gains or losses for more aggressive investors. Some bonds also provide tax-free income. Compared to stocks, bonds offer lower returns but provide benefits like lower risk, stability, high levels of current income, and diversification. The Inflation Indexed National Savings Securities-Cumulative (IINSS-C) bonds offer a 1.5% return above inflation, with interest compounded half-yearly and a minimum investment of Rs. 5,000 and maximum of

3. What Are Bonds?
• Also called “fixed income securities” since
payments are fixed amounts
• Borrower agrees to repay a fixed amount of
principal at a predetermined maturity date
• Borrower agrees to pay a fixed amount of
interest over a specified period of time

4. Why Invest in Bonds?
• They can provide current income for
conservative investors
• At times, they can provide capital gains (or
losses) for more aggressive investors
• Some bonds can provide tax-free income
• They can be used for preservation and longterm accumulation of capital

5. Bonds Versus Stocks
• Compared to stocks, bonds offer
lower returns
• Main benefits of bonds in portfolio:
– Lower risk and level of stability
– High levels of current income
– Diversification
• Bonds add an element of stability to
a portfolio

6. The Inflation Indexed National Savings SecuritiesCumulative(IINSS-C) bonds will offer investors a return that's 1.5% more
than inflation based on the consumer-price-index. Interest will be compounded half
yearly, enhancing effective yield on investments.
The minimum investment limit is Rs. 5,000/- (five thousand).
The maximum limit is Rs. 500,000/- (five lakh) per applicant per annum.
Only retail investors would be eligible to invest in these securities. The retail investors
would include individuals, Hindu Undivided Family (HUF), charitable institutions
registered under section 25 of the Indian Companies Act and Universities incorporated by
Central, State or Provincial Act or declared to be a university under section 3 of the
University Grants Commission Act, 1956 (3 of 1956).
Inflation Indexed National Savings Securities-Cumulative (IINSS-C) is not tax free: While
RBI offers a rate of interest over and above the benchmark inflation rate, the returns
generated in form of interest is not tax free. - See more at:
http://healthofmywealth.com/two-reasons-why-inflation-indexed-national-savingssecurities-cumulative-iinss-c-is-not-worth-investing/#sthash.gpAswGVh.dpuf