Investment Bonds vs Fixed Bonds: A Comparative Study

Invest Now In FD

Book your FD in 4 simple steps

Bonds Vs Fixed Deposits

Bonds and Fixed Deposits (FDs) are both investment options that involve lending money, but they have some key differences. The choice between FDs and bonds depends on various factors, including your financial goals, risk tolerance, and investment horizon. Read on to learn more about the key difference between the two.

Fixed Deposits and Bonds: Head-to-head Comparison

Criteria	Fixed Deposits	Bonds
Issuer	Banks, post offices, and non-banking financial institutions	PSUs, government bodies, municipalities, and private companies
Risk	Low-risk	Varies depending on the issuer (Government bonds have lower risk)
Return	Fixed, predetermined interest rate	Can potentially offer higher returns than FDs
Liquidity	Possible with penalties for premature withdrawal	Depends on market conditions and bond terms
Tenor	Fixed, predetermined	Varies (short-term to long-term)
Market value fluctuation	Stable (principal amount remains constant)	Can fluctuate based on interest rates and market conditions
Interest payments	Periodic interest payments or lump sum at maturity depending on your choice	Periodic interest payments or lump sum at maturity based on the bond terms
Investment horizon	Suitable for short to medium-term goals	Suitable for medium to long-term goals

The choice between Fixed Deposits (FDs) and Bonds can be subjective and depends on

various factors such as your personal financial goals, risk appetite, and time horizon. Both options have their own merits, and the decision ultimately hinges on your specific circumstances and preferences.

It might be worthwhile to carefully evaluate the features of each, considering factors like your investment goals, need for liquidity, and tolerance for market fluctuations.

Fixed Deposit and Other Investment Comparisons
Certificate Of Deposit Vs Fixed Deposit	FD Vs RD	NPS Vs FD
Corporate FD Vs Bank FD	FD Vs Real Estate	PPF Vs FD
Cumulative Vs Non Cumulative FD	Fixed Deposit Vs Life Insurance	Short Term FD Vs Long Term FD
Debt Funds Vs FD	Fixed Deposit Vs Savings Account	SIP Vs FD
ELSS Vs FD	Liquid Fund Vs FD	Sukanya Samriddhi Yojana Vs FD
Equity Vs Fixed Deposit	MIS Vs FD	Time Deposit Vs Fixed Deposit
FD Vs NSC

Disclaimer

The information provided by BFDL herein above is related to the Non-Partnered Banks/ NBFCs and is just for the purpose of information and under no circumstances the information provided hereinabove is intended to be source of advice or recommending any financial investment advice or endorsement of any sort.

The information including interest rates with regard to fixed deposit, provided on this website is gathered through publicly available sources over the internet and is considered as accurate and reliable to the best of our knowledge. BFDL disclaims any responsibility or liability regarding inaccuracies, omissions, mistakes etc. as well as offers by the Non-Partnered Banks. The use of information set out is entirely at the User’s own risk and User should exercise due care prior taking of any decision, on the basis of information mentioned hereinabove. You are advised to visit/ contact the respective Banks/ NBFCs to verify the information before making any investment or opening an account. Further, BFDL does not undertake any responsibility or liability to update this information. YOU ARE SOLELY RESPONSIBLE FOR ANY LIABILITY OR DAMAGE YOU INCUR THROUGH ACCESS TO OR USE OF THE SITE OR SUCH INFORMATION OR MATERIALS EXCEPT WHERE THE LAWS AND REGULATIONS OF A PARTICULAR JURISDICTION CONCERNING WARRANTIES CANNOT BE WAIVED. Additionally, display of any trademarks, tradenames, logo and other subject matters of intellectual property owners. Display of such Intellectual Property along with the related product information does not imply BFDL’s partnership with the owner of the Intellectual Property of such products.

Which investment option is generally considered safer?

Government bonds are often considered low-risk, while corporate bonds carry varying degrees of risk depending on the issuer's creditworthiness. FDs, on the other hand, are considered to have low to moderate risk. Also, bank FDs are insured up to ₹5 Lakhs by DICGC.

Can I trade bonds in the secondary market?

Yes, bonds can be bought and sold in the secondary market before maturity, providing liquidity to investors.

Can I redeem my investment before maturity in bonds and FDs?

Bonds can be sold in the secondary market before maturity, but the selling price may be affected by market conditions. In the case of FDs, premature withdrawals are allowed with penalties, while others offer reduced interest rates for early exits.