InvestorQ : What is better a listed bond or Fixed deposit?
Aswini Chikkodi made post

What is better a listed bond or Fixed deposit?

Answer
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simran Kaur answered.
7 months ago


Listed bonds generally offer better yields as compared to bank fixed deposits (FDs). Banks are slashing their rates speedily and the highest rate offered by banks presently is 6.9% for senior citizens and 6.4% for others. However, yields from listed bonds from quality companies are at comparatively higher levels, providing an investor with better opportunities. 
Investing in FDs is very simple. Unlike FDs, investment in bonds can be a little complicated, one has to be really careful that they invest in the right bond. One can consider these parameters for their investment:

Risk appetite:
The first factor that one should consider before making any investment is their risk appetite and how much risk they are capable to take. This is because several bonds from big companies are now trading at higher yields, along with high risk, which means these bonds are only suitable for high-risk takers. The maximum return offered by high-quality bonds is around 8.5%.

Liquidity:
Liquidity under FDs is generally not an issue, as banks allow immediate withdrawal from FDs. However, this is not the case with bonds. For liquidating your investment you need to sell those in the market and you will receive money only after a few days of sale. Also, there are some bonds that come with a higher maturity period and could be a loss for you if you sell them before maturity.

Taxation: 
The next thing that you should consider is the tax slab. Listed tax-free bonds are a great option for those who fall under a higher tax bracket as tax-free bonds yields for HNIs(individuals falling in 30% tax bracket) is around 8.5%. So, whatever you choose for your investment, make sure you consider all the important factors before deciding.