The return on bank fixed deposits rate not beat inflation. Gold and other metals are good but very volatile right now. While they generally do not go, the pace of different assessment. In such a situation, non-convertible debentures (NCDs) will be an option to consider. They offer a higher interest rate than a bank FD, bonds or infrastructure. And while they were not very popular for a while, they are now back.

For example, Shriram City Union recently published the ENT and offers an interest rate of 12 percent. If you look at typical bank FD, the interest rate is about 10 percent. The tax system is very different from both. A convertible debenture is a certificate of obligation or debt that can be converted into shares after a predetermined period. A DEM of others is a common bond, which can be converted into shares.

Since convertible bonds have the opportunity to become shareholders, which offer less interest. MNT offer higher interest rates. Not surprisingly, they are catching on in popularity. MNT may be secured or unsecured. MNT guaranteed are less risky because they are secured with a pledge of the assets of the company. If the company is unable to fulfill its obligation, the company's assets are sold to pay the holders of non-communicable diseases. Unsecured MNT riskier because they are not backed by any collateral. MNT unsecured nature offer a higher interest rate than insurance.

Characteristics of MNT?
The mandate of NCD ranges from two to 20 years and they are very flexible. Contrary to the Framework Decision banking, you do not keep it for years to claim interest as they can be bought and sold on the secondary market at will.
The tax system is simple NCD. If you sell before a year, you pay taxes based on the edge of falling. If you sell after one year, you pay tax of 10 percent or 20 percent, depending on whether you use indexing.

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Usually, NCD offers better interest rates on bank FD. Bank policy rate depends on the revised rates by the RBI. If the RBI also increased interest rates and the bank to increase interest rates, yields may not be very attractive to non-communicable diseases.

Risk factors:
However, these links may appear attractive and safe, even, especially if it is a good company, there is a risk investors have to know. NTM are relatively safe, but certainly less safe than the City banks and government bonds.
Banks are normally never fault the Reserve Bank of India will come to the rescue, while most of the time. Governments never default. The issuer may default MNT if the company is facing problems in the payment of the obligation to the bondholders.

Key Points:
Non-convertible debentures (NCDs) is supposed to get ratings from rating agencies such as ICRA and CRISIL. Investors should check the rating MNT before investing. Higher ratings mean that the company has sufficient resources to service its debt.

Liquidity is another problem. Although the most points, the diseases are not very popular tools for investors, and therefore may be difficult to sell when they want. If there are not enough buyers, investors can sell at lower prices, which affects the yield.

Finally, if interest rates rise, maternal and neonatal tetanus will go down in value. As in the case of FDI, investors can break existing deposits and open a new one with higher interest rates, and is not as easy in the case of non-communicable diseases. MNT elimination is difficult due to low market liquidity.

Source: [Deccan Chronicle]