Investing money is very important in today‘s scenario. Keeping money in a bank or cash in hand is of no use. Investing money leads to growth and more earnings which is beneficial. But one must not invest in the only type of portfolio. There are various kinds of the investment portfolio in which one can invest like equity shares, preference shares, mutual funds, bonds etc. One can even use different kinds of investment strategies depending on the benefits provided by each one of them. One can divide their money into different portfolios based on a certain ratio.
Amongst all bonds are one of the essential portfolios for investing money. U.P Power Corporation limited 9.75% Bond is one of the best bonds in which one can invest for higher returns. But people invest more in shares as compared to bonds. So, here are discussed some of the benefits of investing in bonds:-
1) Generates income-Bonds amongst all the other investment options helps to generate more stable and high income. They have lower volatility rates. They help one to fulfill their income needs. It helps to generate more income than money market instruments also. One must invest in bonds if he wants a high return.
2)Benefit of diversification-It is generally told that one must not invest all their money in one portfolio. As it can be a too risky venture. Diversification helps to adjust the risk as compared to investing in only one of a kind. Bonds help to save capital when the stock market is collapsing.
3) Tax benefit-Bonds provide a tax benefit to the person holding it. Municipal boons are tax-free. Mostly the money market instruments and bank instruments are taxable and the person has to pay tax on it. If the one owns a municipal bond which is issued by the state in which he is living he will be free from the tax burden.
4) Helps to preserve principal amount-It is beneficial for those persons who might need cash in the coming future. It may be a person who is going to retire in the coming 5 to 10 years or a person whose child is going to enter college. Bonds are much less risky than the stock market which might crash at any given time. One must try to invest in diversified to minimize the risk and increase their return. Bonds helps to fulfill the fixed income needs of the person.
Bonds are one of the best methods for investing your money. Investing money is very important in today‘s scenario. Keeping money in a bank or cash in hand is of no use. Investing money leads to growth and more earnings which is beneficial. But one must not invest in the only type of portfolio. They help to generate higher income with relatively less risk. There are various kinds of the investment portfolio in which one can invest like equity shares, preference shares, mutual funds, bonds etc. One can even use different kinds of investment strategies depending on the benefits provided by each one of them. One can divide their money into different portfolios based on a certain ratio.
They provide the option of diversification which helps to save their capital during the time of need. They provide one with the fixed capital amount at a given time which is one of the most important advantages of bonds. So the person is not required to go from one place to another to gather the amount. 9.75%UP power Corporation limited bond also provides one with the tax benefit. One must read the terms and conditions beforehand and the risk attached to them.
