FinCoHolic · Educational
Complete guide to bonds — overview
Nine chapters: what bonds are, key terms, types, issuers, ratings, YTM, risks, checklist, and comparison with other assets.
- Issuer borrows; you lend and earn coupons + principal at maturity.
- Higher safety usually means lower yield.
- Always read rating, YTM, and offer document — not advice.
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Chapter 1
What is a bond?
A formal promise to repay borrowed money with interest — like a written IOU at scale. You receive coupon payments and face value at maturity.
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Chapters 2–3
Key parts & types
- Face value, coupon, maturity, market price, YTM.
- Fixed, floating, zero coupon, G-Sec, corporate, callable, puttable.
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Chapters 4–6
Issuers, ratings & YTM
- Govt → PSU → bank → corporate — risk ladder.
- Prefer AAA/AA for beginners; understand AAA to D scale.
- YTM is your true return if held to maturity.
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Chapter 7
Advantages & risks
- Plus: predictable income, diversification, seniority over equity.
- Minus: inflation, liquidity, default, interest-rate risk.
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Chapter 8 · Checklist
1. Check credit rating
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CRISIL / ICRA / CARE Prefer A and above; beginners: AAA or AA only.
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Chapter 8 · Checklist
2–5. Tenure, calls, goals, YTM
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Maturity Match lock-in to when you need cash.
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Callable bonds Issuer may repay early — cuts future interest.
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Your goal Income & stability, not stock-like growth.
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YTM Compare true yield, not coupon alone.
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Chapter 9
Bonds vs FDs, stocks, gold
Bonds balance safety and return. Mix depends on age, income needs, and risk tolerance. Verify with professionals before investing.
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