Bonds

Bonds are commonly referred to as fixed - income securities and are one of the three main generic asset classes along with stocks (equities) and cash equivalents. Many corporate and government bonds are publicly traded on exchanges, while others are traded only over-the-counter (OTC).

Misconceptions about bonds abound, but the fact is that bonds can contribute an element of stability to almost any portfolio. Bonds are a safe and conservative investment. They provide a predictable stream of income when stocks perform poorly, and they are a great savings vehicles for when you don't want to put your money at risk.

G-Secs

A government security (G-Sec) is a debt obligation of the Indian government to fund their fiscal deficit. These instruments are tradable and are issued either by the central or the state government. These securities are offered for short term as well as long term. Short-term instruments with a maturity of less than one year are typically called treasury bills (T-Bills) whereas long-term instruments are called government bonds or dated securities with a maturity of one year or more.

The advantages of investing in G-Secs is that they are secure, offer liquidity and stable returns. If interest rates go down then investors will see appreciation in capital.

There is no TDS for investing in bonds, but the interest income is added to your income and taxed according to your slab.

Investing in G-Secs is a good option for, say, a self-employed person. You can earn interest income every six months, which you can reinvest in other instruments. Since these are long-term bonds, it also makes sense to invest from a long-term point of view.

Gold

Now investing in gold need not mean large sums of money. In the available Gold Funds one can invest in a disciplined manner with amounts as small as Rs 1000 per month or if you so desire you can invest one time lump sum amounts starting from Rs 5000.

Key Features

• Systematically invest in gold each month through SIPs(Systematic Investment Plans)
• Buy gold in amounts as small as Rs 1000 without having to worry about purity
• No demat account required
• Buy/sell units of Gold Fund on any business day at NAV based prices
• No storage charges, no making charges, no safe-keeping worries
• Suitable for an investment horizon of 3 years or more

This Product is suitable for Investors who are seeking

• Capital appreciation while generating income over medium to long term.
• Investment in debt and money market instruments as well as equity and equity related instruments while managing risk through active asset allocation.