https://www.indiainvestments.wiki/bonds/Recent content in Bond Basics on r/IndiaInvestments WikiHugoen-inhttps://www.indiainvestments.wiki/bonds/section-2-government-securities/Mon, 01 Jan 0001 00:00:00 +0000https://www.indiainvestments.wiki/bonds/section-2-government-securities/<h1 id="government-securities">Government Securities</h1> <p>A government security is a type of bond issued by the Central Government or the State Governments. They are broadly classified into two main categories based on the duration.</p> <ul> <li><strong>Short Term Bonds</strong> - Colloquially known as Treasury Bills (T Bills), these are secrurities that are issued for durations shorter than a year. Generally, only the central government issues this type of securities.</li> <li><strong>Long Term Bonds</strong> - These are dated securities which are sometimes referred to as GSecs (despite only being a subset of government securities). There are issued by both the central government as well as the state governments. When issued by the latter they are reffered to as State Development Loans (SDLs).</li> </ul> <p>Due to being issued by the government itself, these bonds are a form of sovereign debt and have low credit risk. The overall risk of a nation&rsquo;s bond can be assessed by looking at their sovereign credit rating which is an assesment of the creditworthiness of a country. For example, India&rsquo;s credit rating as of this article is BBB- according to Fitch and Baa3 according to Moody&rsquo;s which is the minimum grade required for a bond to be considered &ldquo;investment grade&rdquo;. Furthermore, investors see full transparency of the investment process as the RBI conducts the auction for participants to see. As such these can play a crucial role in an investor&rsquo;s portfolio for long term wealth creation as a low risk debt instrument.</p>https://www.indiainvestments.wiki/bonds/corporate-bonds/Mon, 01 Jan 0001 00:00:00 +0000https://www.indiainvestments.wiki/bonds/corporate-bonds/<h1 id="corporate-bonds">Corporate Bonds</h1> <p>In the previous module we learnt about bonds issued by government but governments are not the only entities that raise debt through bonds. Bonds that are issued by private and public corporations are known as corporate bonds. Companies may issue debt to raise money for a variety of purposes for example to raise money for a new plant and these bonds act as a way for people to lend money directly to the company.</p>