#3385 new
Bonds India

Why to invest in Zero Coupon Bonds in India

Reported by Bonds India | December 11th, 2021 @ 06:43 AM

If you are a regular investor in bonds in India, you will definitely have known by now that there are some bonds called Zero Coupon Bonds that do not actually give out any payments as interest. If you invest in Zero Coupon bonds pay interest only on the maturity of the instrument instead of regular payouts like other Government bonds, Corporate Bonds, Tax Free Bonds, PSU Bonds, Convertible Bonds, Sovereign Gold Bonds, Perpetual Bonds, Green Bonds, Covered Bonds, State Development Loans and Market Linked Debenture . Hence, they are called as Zero Coupon Bonds. In every zero coupon bond interest rate is accrued annually. This accruing of interest is necessary, because conventionally, the annual increase in the value of the zero coupon bonds in question are reported as interest earned.

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