Wealth is the product of man's capacity to think. - Ayn Rand

Fortune sides with him who dares.

- Virgil

There is nothing like a dream to create the future. - Victor Hugo

Know what you own, and know why you own it. - Peter Lynch

The best investment on earth is earth.

- Louis J Glickmann

The goal of retirement is to live off your assets, not on them. - Frank Eberhart

Bonds & Fixed Deposits


Myra & Co., is a complete financial solutions provider and we place our client's objectives foremost. As an investment manager we understand that in order to build a comprehensive portfolio, it is imperative that a certain portion be reserved for debt instruments in order to strike a balance between risk and return.

- We help you select the appropriate debt products, keeping in mind your financial goals, liquidity and tax planning requirements.
- Last but not the least; we take all the hassles of investing in bonds on our client's behalf including the wearisome efforts involved in extensive paperwork and documentation.

All fixed deposits, debentures, bonds are categorized as debt instruments where the investment earns a fixed amount as interest income at a rate of interest, referred to as Coupon Rate.


A lot of investors feel secure to invest in Deposits for one simple reason - The Capital is protected and there is an interest income, which is generally assured and known at the time of investment.

But this investment approach fails to factor-in the effects of inflation which is usually overlooked. If the rate of interest earned on a fixed interest income instrument, i.e., Coupon Rate is lower than the rate of inflation, the investment will yield negative returns.

A brief illustration will explain this.

Suppose you invest Rs. 100 in a scheme, which doubles your money in 10 years (interest rate 7.2%), you will receive Rs. 200 at maturity. At the end of 10 years you will be happy that you not only got your Rs. 100 investment intact, but also got Rs. 100 extra by way of return. All in all a good investment decision, isn't it? But if the average inflation during this period is say 8% then you would have actually lost money. Rs. 200 that you now have has even lesser buying power than Rs. 100 you had 10 years ago. The sad part about this is that you will not know it but will just have a vague feeling of not being able to keep up with the expenses.

With this illustration, we do not advocate that one should not invest in Fixed Deposits at all. Instead, we merely intend to make investors recognize the perils of the underlying assumption which says that - Fixed Deposits are absolutely safe and it is the only investment of choice for the risk-averse individuals.


- Put simply, a bond is a debt instrument.
- It is like a loan that an investor gives to the issuer of the bond.
- The issuer could be a company, the Government, a financial institution etc.
- Unlike stocks, bonds do not give investors ownership in a company.
- Every bond has a fixed interest rate as well as a fixed maturity date, ranging from a few months to a few years.
- Types of bonds include government securities, corporate bonds, fixed deposits, small savings schemes, infrastructure bonds etc.

Why invest in debt papers like Fixed Deposits, Bonds and Debentures?

- Regular income: Bonds have a fixed income over a fixed period. This makes them an attractive avenue for individuals looking for stable income.
- Low risks: Debt papers entail lower risks. It is ideal for risk-averse investors. Government bonds have zero risk attached to them. This safety element attracts the attention of the investors to these bonds.
- Liquidity: You can invest in bonds for a shorter duration as well, making them a highly liquid investment avenue.

Types of Debt instruments - Debt Schemes of Mutual funds.
- Fixed Maturity Plans
- Capital Gains bonds
- Company Fixed Deposits


Challenges faced while investing in bonds and debentures

Although bonds entails lower risks as compared to equities and equity funds, as an investor, one needs to tread with caution when it comes to investing in such instruments.

Many investors fail to comprehend the following aspects while investing in bonds :

Credit Rating-Becomes particularly important when it comes to investing in company fixed deposits. The credit rating indicates how safe the principal is in the given company. A company with a poor rating has high probabilities of defaulting on repayment of principal and interest.

Real Returns - Real Returns offered by a bond should be estimated rationally, that is, the return post inflation and tax, before committing any investment to this instrument. Overlooking this significant parameter could also result in earning negligible yield on a bond investment...!!!

Liquidity - Debt investments are not a very liquid avenue, particularly long term debt investments. Once invested, funds get locked-in till the maturity of the instrument. Also the secondary market for these instruments is not yet developed in India. An intelligent investment manager carefully examines the potential liquidity of an investor, exit route and penalties of the instrument before allocation of the funds to such instruments to a portfolio.

Over-investment-A portfolio with an increased composition of the debt instruments also runs the real risk as the returns may turn out to be