Investment is time, energy, or matter spent in the hope of future benefits actualized within a specified date or time frame. Investment has a different meaning in finance from that in economics. In finance, investment is buying or creating an asset with the expectation of capital appreciation, dividends (profit), interest earnings, rents, or some combination of these returns.
Corporate Deposits are loan arrangements where a specific amount of funds is placed on deposit under the name of the account holder. The money placed on deposit earns a fixed rate of interest, according to the terms and conditions that govern the account. The actual amount of the fixed rate can be influenced by such factors at the type of currency involved in the deposit, the duration set in place for the deposit, and the location where the deposit is made.
Benefits of investing in Company Fixed Deposits
* Please contact us or reffer company's website for latest rate of interest.
These bonds are exemted from income tax and have attractive intrest rate. Since company have better credit rating they have better safety on returns, also option of holding bonds in "Demat Form" makes your investment easy to handle and monitor.
Capital Gain be saved Under Sec 54EC or Sec 54F, if the land or property sold is non agriculture. We deal in such bonds which qualify for Sec 54EC Bonds.
To claim Section 54 EC following conditions is to be satisfied.
some on the issuers of 54EC Bonds are as follows:
A type of debt instrument that is generally not secured by physical asset or collateral. Debentures are backed only by the general creditworthiness and reputation of the issuer. Both corporations and governments frequently issue this type of bond in order to secure capital. Like other types of bonds, debentures are documented in an indenture.
Debentures have generally no collateral. Bond buyers generally purchase debentures based on the belief that the bond issuer is unlikely to default on the repayment. An example of a government debenture would be any government-issued Treasury bond (T-bond) or Treasury bill (T-bill). T-bonds and T-bills are generally considered risk free because governments, at worst, can print off more money or raise taxes to pay these type of debts
A debenture is a document that either creates a debt or acknowledges it, and it is a debt without collateral. In corporate finance, the term is used for a medium- to long-term debt instrument used by large companies to borrow money. In some countries the term is used interchangeably with bond, loan stock or note.
A debenture is thus like a certificate of loan or a loan bond evidencing the fact that the company is liable to pay a specified amount with interest and although the money raised by the debentures becomes a part of the company's capital structure, it does not become share capital. Senior debentures get paid before subordinate debentures, and there are varying rates of risk and payoff for these categories.
There are two types of debentures:
sovereign gold bonds are alternative way to invest in gold offered by Indian Government. They are safer,cheaper, and earn better net return then physical gold as they also earn intrest along with capital gain.
For Indians, gold is more than a precious metal. In fact, the reverence for gold is beyond its market value for a common man. However, the making charges of gold can be quite high. Therefore, Government of India and RBI have come up with many alternatives like gold ETFs, gold bonds etc. Here, you can own gold in ‘certificate’ format. This article explores Sovereign Gold Bonds in detail.
The government of India lately introduced Sovereign Gold Bond Schemes to offer investors another way to own gold. Hence, it belongs to the debt fund category. It not only brought down the demand for real gold, but could also track import-export of the same. There is a transparency about this product as it comes under the purview of RBI. People who see gold more as an investment than an accessory (ornament), can opt for this. So, they need not waste money on making charges. Nor do they have to find ways (like hiring a bank locker) to store it safely. SGBs are government securities and hence safe. Their value is denominated in multiples of gold grams. This is why, it is a substitute for investing in physical gold. If you want to purchase a bond, just approach any agent, authorized by SEBI. After redeeming the bond, they will deposit the corpus (as per the current market value) to your registered bank account.
People who have a penchant for gold investments can consider sovereign gold bonds. As a low-risk investment, it is perfect for investors with low risk appetite. It also earns you a fixed income bi-annually. Therefore, if all these appeal to you, you can certainly consider buying an SGB. Compared to physical gold, the cost to purchase or sell SGBs are quite low. The expense of buying or selling the SGB is nominal in comparison to the physical gold. Those who do not want the hassle of keeping physical gold safe can also go for this. This is because it is easy to store this in demat form, and nobody can steal it as they are in paper form. So, if you are seeking a long-term investment avenue to make good returns, a gold bond can meet your needs.
Any Indian resident – individuals, Trusts, HUFs, Charitable Institutions and universities – can invest in SGB. You may also invest on behalf of a minor.
The value of the bonds is assessed in multiples of gram(s) of gold, wherein the basic unit is 1 gram. The minimum initial investment is 1 gram of gold, and the upper limit is 4 kgs of gold per investor (individual & HUF). For entities like trusts and universities, 20 kgs of gold is permissible.
The bond’s maturity period is for 8 years. However, you can choose to exit the bond from 5th year onwards (only on interest payout dates).
You can pay online, by cash (only up to Rs. 20,000), DD or cheque. There will be a service charge deduction of Rs. 50 of those who pay online.
The current interest rate for SGB is 2.50% annually. They are paid twice a year on the nominal value. Returns are usually linked to the current market price of gold.
Only Government of India Stocks (on RBI’s behalf) can issue gold bonds as per the GS Act, 2006. Investors will receive a Holding Certificate for it. You can also convert it to demat form.
You must follow the same Know-your-customer (KYC) norms when you buy physical gold. Hence, keep the KYC documents like copy of Driving License, PAN Card, Passport or Voter ID with you.
There is no tax deducted at source on the proceeds from sovereign gold bond redemption. You can also claim indexation benefits along with long term capital gains when you decide to transfer the bond. So its tax implications are different from that of gold ETFs.
If banks have acquired bonds after going through the process of raising lien, hypothecation or pledging, they get counted towards SLR. The capital a commercial bank has to retain before giving credit to customers is called Statutory Liquidity Ratio.
The redemption price must be in INR, based on average of closing price of gold of 999 purity in 3 previous working days.
The government sells bonds through banks, Stock Holding Corporation of India Limited (SHCIL) and selected post offices as may be informed. The trading also occur via recognized stock exchanges (National Stock Exchange of India or Bombay Stock Exchange) directly or through intermediaries.
The receiving offices shall levy 1% of the overall subscription amount as commission for bond distribution of the bond. From this commission, they will share at least half with intermediaries (agents or brokers).
Sovereign gold bonds carry none of the risks that is associated with physical gold, except the market risks. There is no hefty designing charge or TDS here. Therefore, nobody can steal it or change its ownership.
You can earn guaranteed annual interest at the rate of 2.50% (on the issue price). This is the most recent fixed rate.
If you transfer your bond before maturity, you can get indexation benefits. There is also a sovereign guarantee on the redemption money as well as on the interest earned.
You can trade the gold sovereign bonds on stock exchanges within a specific date (at the discretion of the issuer). For instance, after completing 5 years of investment, you can trade them on National Stock Exchange or Bombay Stock Exchange among others.
Some banks accept SGB as collateral/security against secured loans. Hence, they will treat it as a gold loan after setting the loan-to-value (LTV) ratio to the value of gold. The India Bullion and Jewellers Association Limited determines this.
From 01.04.2020, interest rates are as follows:-
Period | Rate |
---|---|
1yr.A/c | 5.5% |
2yr.A/c | 5.5% |
3yr.A/c | 5.5% |
5yr.A/c | 6.7 % |
Scheme | Interest payable, Rates, Periodicity etc. | Minimum Amount for opening of account and maximum balance that can be retained | Salient features including Tax Rebate |
---|---|---|---|
National Savings Certificates (NSC) 5 Years National Savings Certificate (VIII Issue) |
| Minimum of Rs. 1000/- and in multiples of Rs. 100/- No Maximum Limit |
*In case of NSC VIII , transfer of certificates from one person to another can be done only once from date of issue to date of maturity *At the time of transfer of Certificates from one person to another, old certificates will not be discharged. Name of old holder shall be rounded and name of new holder shall be written on the old certificate and on the purchase application(in case of non CBS Post offices) under dated signatures of the authorized Postmaster along with his designation stamp and date stamp of Post office |
Minimum Amount for opening of account and maximum balance that can be retained: Minimum of Rs. 1000/- and in multiples of Rs. 100/- No Maximum Limit.
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