I recently seeing a trend that people are actually moving towards Bonds mostly the secured bonds which gives anywhere between 9 to 11% returns. So someone who invests in the equity gets around 12% and above in the long run, that's what the data suggests. And the FD returns are mostly around 7%. So the Bonds are basically in between these two financial instruments.
PC: WintWealth.com
In simple terms Bonds are like Fixed Deposit basically a fixed-income securities issued by institutions to raise funds through the debt market. The instutions doesnt want to give out equity and thus they take money from inveators using the debt market and thus investors earn returns on their investments. They have a tenure defined which gives you the sense that in how much time you will get your money back.
The Bonds are also attact taxes and there are different types of taxes but there are tax free bonds too, which are mainly issued by the governments or PSUs but their tenure seems to be little high. So now influencers are mainly suggesting people to get into bonds. The thing is people who wants to keep their money safe and also wants to earn little extra then for them bonds works great.
Bit if someone is investing in equity and doesn't want money for the nest 7 to 10 years for them investing in the bonds market doesn't make sense. FD you can break anytime and that's why keeping the emergency money there make sense. The money which comes to you in seconds when the emergency occurs is better and that's why FD serves the purpose. So if you are thinking of moving emergency fund to bonds, you should not.
Only particular case I think of someone investing in bonds is that they want fixed returns and don't want to invest in equity. Or their debt fund in their goals can be invested in the bonds instead of debt mutual fund.
