Govt Bonds or Corporate Bonds? Which One I should Prefer?

Bonds
1

Can anyone please give me a brief? I am thinking to invest in Bonds for a good and safe return.

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2

Hy @ChandanSingh Hope this link helps you :slightly_smiling_face:.

3

My recommendation would be : Tax free Govt bonds.

Safest instrument out there and also tax free

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4

I am also thinking same, but are these safe?

5

Absolutely safe. You will have sovereign guarantee

6

I doubt there are any Tax free govt bonds. Most Tax free bonds are issued by PSU, not directly by Govt of India.

Again, technically you do not have SOV rating or guarantee, this are AAA rated bonds by PSU.

Also, I don’t really see a big advantage of investing in Tax free bonds for normal retailers.

Currently 10 years Tax free bonds are giving 4.6 4.7% return whereas 10 year GSec is yielding 7.1%. So even after paying 30% tax you are still better of holding 10 years Gsec rather than PSU Tax free bond. And you also get Sovereign guarantee with Gsec :slight_smile:

So unless you are higher than 30% bracket, does not make sense to invest in tax free bonds.

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