Bonds are stable, low-risk investment instruments where investors lend money to governments or corporations in exchange for regular interest payments. They are perfect for balancing risk in a diversified portfolio.
Types of Bonds:
- Government Bonds: Highly secure with steady returns.
- Corporate Bonds: Offer higher interest rates with moderate risk.
- Tax-Free Bonds: Interest earned is exempt from income tax.
- Sovereign Gold Bonds: Allows investment in gold without physical storage.
Benefits:
- Regular interest income.
- Lower volatility than equities.
- Ideal for long-term wealth preservation.
- Diversifies risk across asset classes.
Bonds help build a stable financial base while ensuring predictable income and reduced risk exposure.
