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Interest earned on NCDs is paid at a different time periods like quarterly, semi-annually or annually. They also have an option of cumulative interest in which case interest is cumulated & paid on maturity.

They cannot be transferred or converted to equity, unlike convertible debentures that can be converted by the issue of company shares. NCD issues are rated by credit rating agencies like CRISIL, ICRA, FITCH, and CARE to ensure the company's ability to service the debt on time & lower default risk. NCDs can either be secured or unsecured. NCDs secured by the issuer company's assets to fulfill the debt obligation is considered secured NCDs.

If the NCD is held till maturity, the interest earned is added to the total income & taxed at a marginal rate of income tax as per the appropriate tax slab. If the NCD is sold before maturity, Short Term or Long-Term Capital Gains Tax is applicable. No tax Deducted at Source (TDS) on listed debentures, makes them an even more attractive proposition. You can hold them in Demat form to manage them easily.

Why Fixed Income Instrument?

• Earn more than Bank FD - Company FDs would earn more interest income than Bank FDs.
• Choose your Interest frequency - You can choose between monthly, quarterly, bi annual and annual interest options.
• Invest based on Rating - CRISIL and ICRA rating are available for Company FDs which help you assess risk.