Fixed Deposit and Bonds
FD is a financial instrument provided by Indian banks, Manufacturing Companies and Non-Banking Financial Company NBFC which provides investors with a higher rate of interest than a regular savings account.
A Bond is a negotiable debt security under which the issuer borrows a given amount of money, called the principal amount. In exchange, the borrower agrees to pay fixed amounts of interests, also called the coupons, during a specific period of time. Everything is well defined by the bond contract: the coupon rate is the interest rate that the issuer pays to the bondholder and the coupon dates are the dates on which the coupons are paid. Besides, the issuer will repay the total amount of the principal when the bond will reach what is called maturity (or maturity date). In short, a bond is a securitized loan.
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