Understanding Fixed-Income Instruments

As the name implies, fixed-income instruments present a fixed income to the investor. The payout may be obtained at fixed, regular intervals or the end of a specified period. Upon the maturity of an instrument, the principal is returned to the investor. Models of fixed-income instruments are fixed deposits, Public Provident Fund, bonds, debentures, Post Office deposits, and so on.

Why Invest in Fixed-Income Instruments?

Fixed-income instruments are used by people in India to place their savings and receive returns via interest rates more significant than that given by a savings account.
The benefits of fixed-income instruments are:

How Do I Invest In Fixed-Income Instruments?

Based on the type of instrument, you can purchase them directly from the issuer, or the capital market. A few instruments like debentures and bonds are traded on the exchange, and you can obtain them with help from a broker. You have to address the issuers like banks and post-offices to invest in instruments like PPF, fixed deposits, and Post Office Deposit schemes.