okay this might be a basic question
at home it’s always been FD only. like my parents don’t trust anything else. now i’m seeing bonds on BondScanner and everyone saying better returns
but both look like fixed interest only?? so what’s actually different here am i missing something obvious
Not basic at all. This is literally how most people start.
Same situation for me. For the longest time it was only FDs because that’s what family trusted. First time I moved money into bonds, I kept checking every few days if something would go wrong.
Difference is mainly this:
FD feels guaranteed because of the bank and that Rs 5L insurance. Bonds don’t have that cushion. There you’re trusting the company.
But then returns — that’s where the shift happens. Once you see 9 to 10% vs 7%, you start questioning why all money is sitting in FDs.
I still keep FDs. Just not everything there anymore.
same lol
i have like ~3L in SBI FD right now at 7.2%. at that time it felt decent
now seeing these bond yields i’m like okay cool, missed that
did a rough calc last night and difference over 2 to 3 yrs is actually not small
yeah basically it’s just
fd = more safety, less return
bond = more return, but you have to be okay with the issuer risk
most people don’t switch fully. just start shifting a part
Also one small mindset shift helps here.
With an FD, you’re not really thinking about who you’re lending to. It’s just bank hai, safe hai.
With bonds, you’re actually choosing the issuer. So naturally it feels less comfortable in the beginning.
Returns are higher because that comfort is lower.
If you’re just starting, don’t overthink. Try one bond, small amount, see how it behaves over a few months.
yeah that makes sense
i think the company risk part is what was confusing me. fd never feels like a decision, bonds do
One more thing you may want to keep in mind.
Tax treatment is slightly different once you go beyond just holding.
Interest is taxed the same way in both. But if you sell a listed bond after 12 months, gains are taxed at 12.5%.
For someone in the higher tax bracket, that improves the effective return compared to FDs.
wait okay i didn’t even think about post tax
so the gap is actually even more than what i was calculating
Exactly. Most people only look at headline rates.
Real difference shows up over time and after tax. That’s when it starts making sense why people diversify.
got it
will probably try with a small amount first instead of moving everything
thanks everyone, this cleared things up a lot