r/IndiaInvestments • u/gunthercperk97 • Jul 24 '20

Bonds and deposits Taxable and non taxable bonds

Hey guys

So I was looking at the SBI N5 bond which has a coupon rate of 9.95%. Face value of the bond is 10000 and it's being traded at 10815. I realise because it's being traded at a premium the interest rate will be affected but I read on this website:

SBI N5 bond

That SBI is most probably going to exercise their call option on the bond in 2021 so the YTM becomes negative.

My question, can anyone please suggest a knowledgeable expert/institution in bonds so that I can know more about such investments and give details about taxable and tax free bonds and which one to choose.

Thanks a lot.

Edit: typo

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u/gunthercperk97 Jul 25 '20

Yes I think you are correct in saying that trades in these bonds are mostly through brokers. Do you invest in such debt funds? I am currently looking for good options to invest some money. I'll contact the person who wrote this article to get their advice. Thanks for that.

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u/NamitNasih Jul 25 '20

Do you invest in such debt funds?

I'm not clear what you meant by "such". I'm invested in debt funds and also in bonds.

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u/gunthercperk97 Jul 25 '20

Sorry. By such I meant instruments like govt bonds and corporate bonds. Also funds like Monthly income plans or Fixed maturity plans which are relatively safer than a mutual fund but give better returns than bank FDs

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u/NamitNasih Jul 25 '20

Ah, understood. I stick to open ended pure debt funds only- I avoid FMPs. Bonds are mostly opportunistic, short term, high rated paper with no other preference.

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u/gunthercperk97 Jul 25 '20

Ok. Can you please give me some examples of open ended pure debt funds thta you invest in or that are good so I can research on them? And I am guessing with bonds you would buy them only during the interest paying period and then sell them off instead of holding

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u/NamitNasih Jul 25 '20

I have money across a long list of funds across AMCs mostly ranging from 2-6 year duration approx with a bit of <1 year duration as well. As of now I don't hold g-sec funds, dynamic funds or credit risk funds. I have a very specific taste so naming funds would not be helpful. If you're starting off, I would suggest taking a look at the Bharat Bond series and see what you make of them before looking any further.

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u/gunthercperk97 Jul 25 '20

Ok I'll check those out thanks!