Fixed Income Instruments – An Overview

Fixed Income Instruments are financial tools that offer investors a steady and predictable return in the form of fixed interest or dividend payments. These instruments are ideal for conservative investors looking for capital preservation, regular income, and lower volatility compared to equity investments. At Fastzeal, we help you invest in the right fixed income products to balance your portfolio and achieve financial stability.

What are Fixed Income Instruments?

Fixed income instruments are debt-based investment products where borrowers (governments, corporations, or financial institutions) agree to pay investors fixed interest over a specified period and return the principal at maturity. These instruments are designed to provide reliable cash flow and capital protection.

Types of Fixed Income Instruments

1. Fixed Deposits (FDs)

a)      Offered by banks and financial institutions, FDs provide guaranteed returns with flexible tenure options.

b)      Interest rates are higher than savings accounts, making them a preferred choice for conservative investors.

c)      Investors can choose between cumulative (compounded interest) and non-cumulative (regular payout) FDs.

2. Bonds

a)       Bonds are debt securities issued by governments, corporations, and financial institutions.

b)       They offer fixed interest payouts (coupon payments) at regular intervals.

c)       Popular options include Government Bonds, Corporate Bonds, and Tax-Free Bonds.

d)       Suitable for investors seeking a mix of stability and liquidity.

3. Post Office Savings Schemes

a)       Government-backed savings instruments designed for low-risk investors.

b)       Popular schemes include Public Provident Fund (PPF), National Savings Certificate (NSC), Kisan Vikas Patra (KVP), and Monthly Income Scheme (MIS).

c)       Offer tax benefits, stable returns, and long-term wealth creation opportunities.

Benefits of Investing in Fixed Income Instruments

• Regular Income through interest or dividends

• Capital Preservation with lower risk

• Diversification to balance high-risk investments

• Tax Savings via PPF, NSC, Tax-Free Bonds

• Liquidity Options based on instrument selection

• Stability during volatile market conditions
  
  
  

Who Should Invest in Fixed Income Instruments?

• Senior Citizens & Retirees – Seeking monthly income

• Risk-Averse Investors – Prioritizing safety over high returns

• Goal-Oriented Investors – Saving for child’s education, wedding, or retirement

• Tax-Saving Investors – Looking for deductions under Section 80C

• Portfolio Diversifiers – Balancing equity exposure with debt

•  Investors looking for stable income & low volatility.

• Individuals aiming for long-term financial security with government-backed products.
  
  
  

How to Invest via Fastzeal?

1. Explore Product Options – FDs, Bonds, Debt Funds, PPF, etc.

2. Compare Returns & Risks

3. Check Eligibility & Tenure

4. Submit KYC Documents

5. Get Expert Guidance from Fastzeal Advisors

6. Track & Manage Investments Online
   
   
   

Required Documents

• PAN Card

• Aadhaar Card

• Passport-size Photograph

• Address Proof

• Bank Account Details

• KYC Form
  
  
  

Popular Fixed Income Instruments

1. Government Bonds

Issued by central or state governments, considered the safest form of fixed income.

• Examples: T-Bills, G-Secs

• Tenure: Short to Long-Term

• Return: 6%–7.5% approx. (market-linked)
  
  

2. Corporate Bonds & Debentures

Issued by private/public companies to raise capital.

• Higher returns than government bonds

• Credit rating indicates default risk
  
  

3. Public Provident Fund (PPF)

Government-backed long-term savings scheme with tax benefits.

• Tenure: 15 years

• Interest Rate: ~7.1% (compounded annually)

• Tax-free returns under Section 80C
  
  

4. Fixed Deposits (FDs)

Bank or NBFC deposits with assured returns.

• Tenure: 7 days to 10 years

• Interest Rate: 5.5%–8%

• Senior Citizens get higher rates
  
  

5. National Savings Certificates (NSC)

Post office scheme offering guaranteed interest.

• Tenure: 5 years

• Tax deduction under Section 80C

• Safe for risk-averse investors
  
  

6. RBI Bonds

Government of India bonds with fixed 7.35% interest (as of current rates).

• Tenure: 7 years

• Interest paid every 6 months
  
  

7. Monthly Income Schemes (MIS)

Offered by post offices and financial institutions.

• Fixed monthly payout

• Low-risk investment for retired individuals
  
  

8. Tax-Free Bonds

Issued by PSUs like NHAI, PFC, and REC.

• Interest income is tax-free

• Long-term maturity (10–20 years)
  
  

9. Debt Mutual Funds

Pooled investment in bonds, debentures, and money market instruments.

• Higher liquidity and potential tax efficiency

• Varieties: Liquid Funds, Short-Term Debt, Gilt Funds
  
  

10. Non-Convertible Debentures (NCDs)

Issued by corporates with higher fixed returns.

• Riskier than FDs, but better yields

• Listed and tradable on stock exchanges