What are NCDs?

Non-convertible debentures or NCDs are fixed income instruments. Issued by highly rated companies for long-term wealth creation, NCDs have a fixed maturity date. Interest along with the principal amount can be paid either monthly, quarterly or annually.

Non-convertible debentures can be secured (backed by the issuing company’s assets) or unsecured (not backed by the issuer’s assets).

How do I invest in NCDs with us?

SBICAP Securities Ltd., makes it extremely easy and hassle-free to invest in NCDs. You can invest in them either in Demat or physical mode by downloading the form and submitting it to the nearest branch of SBICAP Securities. Also, with us, you can sell them directly through your Demat account, once they are listed on the exchange.​

Benefits of NCDs:

Easily Tradable
As NCDs are listed on the stock exchange, they are easily tradable. In other words, they are highly liquid and be converted into cash when required.​

Low Risk
Note that only enterprises with a high credit rating can issue NCDs. Hence, the risk element in them is quite low and they are a comparatively safe investment avenue.​

Assured Returns
Since NCDs invest in fixed-return instruments, the returns are assured in nature. In other words, the returns are guaranteed.​

Diversification
Investing in NCDs provide the much-needed diversification to your portfolio, which hedges it from volatility.​

Yield to Maturity
With an investment in NCDs, you can earn returns in the form of regular interest and face value amount on maturity.​

Tax Benefits
If you are holding NCDs in the Demat form, then tax will not be deducted at source (TDS). However, note that if they are held in the physical form, TDS is applicable if the interest exceeds Rs. 5,000 in a financial year.​​