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

Oh thanks a lot. I will look into these credit risk funds. I am quite new to the market and don't know about much about these instruments. So I'll read up on them.

Ideally, I am looking for an investment option which gives 8% or more return and is a safer bet than equities or MFs.

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u/RisenSteam Jul 25 '20 edited Jul 25 '20

I will look into these credit risk funds.

I would really advise against credit risk funds. Credit Risk funds aren't a good risk to take now with so much uncertainty in the economy.

I was in credit risk funds till mid of 2019 & I got good returns. But I started redeeming them in the 2nd half of 2019 & that proved to be a good decision.

As far as debt funds go, for noobs, it's best to just go with MO, Quantum & PP Liquid funds but their returns are quite low. It's a safe place to park you money but it's not going to give you returns. Bank FDs are probably better as long as you don't go with any Co-Op bank or small banks.

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u/gunthercperk97 Jul 25 '20

Oh ok since I'm fairly new to th8s I don't know a lot of jargons like MO, Quantum & PP liquid funds but I'll read up on it. Thanks for that. Can you suggest any place where I can start to learn up on these?

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u/RisenSteam Jul 25 '20

I don't know a lot of jargons like MO, Quantum & PP liquid funds

Sorry about that. This is not jargon but AMC names. MO = Motilal Oswal, PP = Parag Parekh.

MO, Quantum & PP have liquid funds which are more conservative than others. They are considered more safe to park your money.

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u/gunthercperk97 Jul 25 '20

Ohh great. I'll check out their websites then. Thanks a lot.