What are Non Convertible Debentures (NCD) ?

Non Convertible Debenture is a monetary instrument issued by Corporate for specified term to raise fund/ pocket through public 

Issue or private placement. This debt instrument cannot be converted into equity. It's a fixed income instrument same as \ bank fixed deposit and can be traded  on  stock  exchanges. Interest can be earned intermittent / intermittent / annually / additive and on maturity lead quantum is paid to the debenture holder.

Benefits of investing in NCDs

NCDs may be an ideal investment as it offers, If one is looking for an investment that generates fixed income periodically.

Refined rate of interest as compared to fixed deposits, postal savings or suchlike investments. 

If the bonds are listed, liquidity as one can vend it in the secondary request before its maturity.

If listed bond possibility of capital appreciation i.e. one can vend your bond at a price refined than your cost price in the request.

Features of Non Convertible Debentures

High rate of returns NCDs in the yesterday have offered interest rates which   were  like  engaging  as  compared to  interest on  other fixed   ‐   income options.

Flexible term the term of NCDs can be anywhere between 2 bits and 20 bits, thereby giving better maturity openings.

Lower credit peril An NCD loses value when interest rate in the  system goes  up  and profit when the interest rate declines. Notwithstanding, when the NCD is held until maturity, one is  likely  to realize the  promised return and the peril due to movement in interest rates is excepted or minimized.

Professionally rated NCDs are rated by honest and professional  credit standing agencies.

Easy liquidity NCDs are generally listed securities hence one can  vend them in the secondary request before maturity.

Capital appreciation As NCDs are listed securities, it can serve from the  oscillations in stock request and may have capital appreciation.

No Levy deduction at source There's no levy deduction at source (TDS TDS) on NCDs offered in DEMAT mode and listed on a  stock exchange  as per section 193 of the IT Act.

Interest Payout Options One could  look at  different  interest  payout  options offered by NCDs  similar  as  serial,  recurrent,  incomplete  ‐  recurrent or recurrent interest payments.

Is NCD a Share or a fixed deposit?

NCD is neither a share nor fixed deposit. It's parallel to fixed deposit in the sense that at time of redemption, the return is fixed.

Are NCDs taxable?

Evanesced forms of NCDs aren't taxable.