Debt Market

What is debt?

Debt is a financial instrument where one borrows money from the other person and promises to pay it back on the decided time period with the interest of the amount borrowed. Various debt products are Fixed Deposit, Bonds, Non-Convertible Debentures, Treasury bill, etc. This debt product is offered by the companies or government to borrow money from the people and in return of that borrowed money the company or government promises to pay back the borrowed amount along with the interest accumulated as per the Rate of Interest declared by the company or government during the borrowing time within the time period decided.

What is debt market?

Debt market is the place where this debt instrument is traded. Some of the debt instruments can be traded in the stock exchange. So when we do trading of this debt instruments in the stock exchange, it is called as debt market.

Why one should invest in debt market?

Investing in debt instruments is less risky product for investment and gets an assurance of certain amount of guaranteed return.

What are the factors we should consider before investing in debt market?

Investment in debt instruments is safe but we have to look out the rating of the debt instrument given by the rating agencies and consider the profile or background of the company in whose debt instrument we are investing.

How should we go for investing in the debt market?

Investing in debt market is easy. We can buy the Bank Fixed Deposit from the bank, and can buy various Corporate Fixed Deposits, Bonds, NCD’s, and Treasury bill, etc. from the brokers or Financial Advisors or can be bought in the stock exchange or can be invest through the Mutual Funds.

What are the types of product available in debt market?

The type of products available in debt market is as follows:

• Bank Fixed Deposits
• Corporate Fixed Deposits
• Corporate Bonds
• Government Bonds
• Treasury Bill
• Non-Convertible Debentures
• Government Security Papers
• National Saving Certificate (NSC)
• Kissan Vikas Patra (KVP)
• Public Provident Fund (PPF)
• Certificate of Deposit and
• Commercial Papers, etc.