Is Zero-coupon bonds right investment option for you
Is Zero-Coupon Bond a Good Investment Choice?
Even though zero-coupon bonds do not offer interest during their life, they can prove to be a smart investment choice due to several reasons. Let’s have a look at them:
These bonds come with a long-term maturity date. This means that if you invest in zero-coupon bonds, you can plan for your long-term financial goals with these bonds.
Since these bonds are available at heavy discounts, you need not shell out a huge amount of money to buy them. Even if your investment budget is small, you can buy deeply discounted zero-coupon bonds and watch your investment grow over the years till its maturity.
Since you buy these bonds at a discounted price, they offer you a higher payment on their maturity, compared to other bonds.
Also, as these bonds do not offer interest, there is no question of reinvesting. This does away with the reinvestment risk on these bonds, making them much safer than other investment options.
Zero-coupon bonds are only subject to capital gain tax and the bondholders need not pay any tax on the interest as these are tax-free bonds.
How to Buy Zero-Coupon Bonds
Brokers: You can open a Demat and Trading account with a registered broker and buy zero-coupon bonds through them.
Online Platforms: To invest in zero-coupon bonds online, you can visit any leading online bonds platform like BondsIndia and make informed decisions while investing your money.
NSE and BSE Apps: You can buy the government-issued zero-coupon bonds through the mobile or web-based apps of NSE and BSE using the services of a facilitator or aggregator.
RBI Retail Direct Scheme: The RBI Retail Direct Scheme is a recently launched scheme by the RBI through which you can buy government-issued zero-coupon bonds.
Zero-coupon bonds are a great investment choice if you are looking for a low-budget investment option available at a lesser risk. To conveniently buy zero-coupon bonds, click here to BondsIndia.com.