Bonds in general extend a host of benefits to investors, however Public Sector Undertaking Bonds bring with it added advantage to investors. Following are some of the benefits or reasons why investors should invest in PSU Bonds
Low Risk and considerable safety - In comparison to other corporate Bonds or other volatile investment options, PSU Bonds are considered to be a safer investment choice as majority stake in PSU companies is owned by Government. As a result, these bonds generally enjoy a higher credit rating of AAA with the least possibility of default.
High Liquidity – Since PSU Bonds have a higher demand with all category of investors looking to invest in these bonds, PSU Bonds therefore possess higher liquidity in the secondary market.
Better Returns than FD – Investors who invest in PSU Bonds enjoy higher interest on their investments in comparison to the returns earned on Fixed Deposits.
No penalty on Exit – Exiting your investments in bonds is easier in comparison to other investment options like Fixed Deposits, ppf etc. Incase of emergencies, investors can sell their PSU Bonds in the secondary market prior to maturity unlike Fixed Deposits where investors are required to hold their investments for the entire duration of the term or pay pre mature withdrawal charges