Corporate bonds are becoming a popular way for businesses to raise money quickly and at a lower cost than bank loans. These bonds, issued by both private and public companies, help cover short-term expenses and support growth. Investors prefer corporate bonds as they provide a source of regular income as well.

What Are Corporate Bonds?

Corporate bonds are issued by corporations that help them raise money to cover short-term expenses. They are debt instruments issued by both private and public corporations. Corporate bonds also help get capital for growth and development.

These funds are becoming popular because they cost less than bank loans for businesses to raise the money they need.

The Best Corporate Bonds In India:

Listed below are some of the best corporate bonds in India.

• Aditya Birla Sun Life Corporate Bond Fund Direct-Growth

• SBI Corporate Bond Fund Direct Growth

• Tata Corporate Bond Fund Direct Growth

• ICICI Prudential Corporate Bond Fund Direct Plan-Growth

• Bandhan Corporate Bond Fund Direct-Growth

• Nippon India Corporate Bond Fund Direct-Growth

• HDFC Corporate Bond Fund Direct Plan Growth

• Edelweiss Corporate Bond Fund Direct-Growth

• Kotak Corporate Bond Fund Direct-Growth

• Axis Corporate Debt Fund Direct-Growth

Features Of Corporate Bonds

The significant features are:

• Higher return: corporate bonds give higher returns than other debt instruments.

• Liquidity: as it is mainly for businesses to get short-term finance, it is very liquid in nature.

• Security: they have a lower associated risk than shares as they are a financial liability to the company.

Investing In Corporate Bonds:

You can invest in these funds with the help of an intermediary company or asset management company.

• Sign up or register for the application.

• Complete the KYC procedure.

• Pick the mutual funds of your choice.

• Deposit the funds for your investment.

It is said that the higher the risk, the higher the return on investment. That is why corporate bonds offer higher returns than fixed deposits. To compensate for this risk, companies usually offer higher interest rates on their bonds compared to the interest rates on FDs, which are generally considered low-risk investments. Corporate bonds also benefit from favourable corporate bond market conditions, further increasing the chance of higher returns.

Conclusion

In conclusion, corporate bonds are a better investment choice than fixed deposits (FDs) if you’re looking for higher returns. While FDs are safe and give steady but low interest, corporate bonds offer much higher returns because they carry more risk. For investors who don’t mind taking on a bit more risk, corporate bonds can lead to higher earnings. It is important to check the company’s financial health before investing.

Visit the official RBI website for more queries regarding corporate bonds.