June 24, 2012 12:20 am
I am planning to invest in debentures of an NBFC for 5years.They are not authorised to accept fixed deposits.
Please tell me the difference between debentures and fixed deposits?are debentures more risky?
Dear Aseef, are you aware that in case your NBFC is not able to sustain it’s business, these debenture holders ‘ll be the last person to get any penny during the liquidation process of the company. Losing your money is the biggest risk.
When govt. takes loan they call it BOND and when private companies take loan they call it DEBENTURE. If you want to invest in it then please check the company rating (TATA, Reliance, etc.) are the companies that you should be looking at or else go for Govt bonds which are safe. Fixed deposit in private Bank or debenture in a of a private company are always risky.
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