Question 1

What are bonds?

Accepted Answer

Bonds are fixed-income securities that are issued either by government bodies or private institutions to raise funds through the debt market. The investors earn returns on their investment during a pre-decided tenure.

Question 2

How does the debt market work exactly?

Accepted Answer

Corporations need financing to acquire new customers, launch new products, or expand their business. To secure these funds, they can either go to equity markets and liquidate their holdings or look towards the debt market. Issuing bonds in the debt market allows these institutions to raise funds without giving away their ownership.

Question 3

What are Senior Secured bonds?

Accepted Answer

A secured bond is a bond that is backed by some kind of collateral like property or asset of the Issuer. In case the Issuer is an NBFC, a secured bond is generally backed by the collaterals behind a pool of personal, gold, and vehicle loans provided by the NBFC to its borrowers. The term senior in a 'senior' secured bond indicates that, in case of a default, these bondholders enjoy higher priority in getting repaid than some other types of investors like equity-holders, sub-debts etc.

Question 4

Where do bonds fit in your portfolio?

Accepted Answer

Bonds open up a new asset class for your portfolio. An option with lower risk profile (compared to the equity market) and pre-decided returns. In traditional investing options, the equity market offers high returns at the cost of increased risk and volatility while FDs offer stability with fixed returns but at the cost of low returns. Bonds serve as the bridge here. With carefully curated bonds on Wint Wealth, you get 9-11% fixed returns in a short tenure of 1-3 years. Full disclosure: Investing in bonds is riskier than FDs. Please do your due diligence before investing. So, investing in bonds can add stability to your portfolio with fixed returns without you having to settle for lower returns.

Question 5

How can you invest in bonds on Wint Wealth?

Accepted Answer

Investing in bonds requires only 4 steps:
1) Signing up: Just enter your phone number and sign up to view bonds that are live on our platform.
2) Completing your KYC: Enter your details (takes 5 minutes) and have us verify them instantly.
3) Choosing your next investment: With an approved KYC, you can invest in any bond that is live on our platform.
4) Getting bond units transferred to your Demat: Once the investment is made, the units will be transferred to your Demat account within 5 working days.

Question 6

Why should I invest in bonds with Wint Wealth?

Accepted Answer

As one of the largest platforms for investing in bonds in India, Wint Wealth's strength lies in the meticulous curation of the bonds that go live on our platform. From a large number of bonds available in the market at any given time, our team of finance experts carefully curates only those senior secured bonds that meet their strict criteria (Know more about them here). To keep in line with our motto of keeping our skin in the game, Wint Wealth also invests a small % in every bond that goes live for our users.

Question 7

What is Wint Wealth's role in Bond Investment?

Accepted Answer

Wint Wealth is a tech platform providing a conjunction for buyers and sellers of fixed-income securities. We carefully curate assets from the debt market that give investors fixed returns in a tenure of 1-3 years.

Question 8

Is investing in bonds risky?

Accepted Answer

High returns come with high risks attached to them. Here are the risks that investing in corporate bonds carries:
1) Bankruptcy: In case the bond-issuing NBFC declares bankruptcy due to disruption of any kind, it becomes difficult for the investor to recover their funds. Even though senior secured bondholders enjoy a higher priority in getting repaid during bankruptcy proceedings, there is still some risk of partial or complete loss of investment. (Know more about them here).
2) Liquidity: Bonds, by nature, are illiquid assets. Hence in case an investor decides to sell the bond, there are chances that they might not find a buyer immediately. Although, in most cases, investors find buyers eventually.
3) Fraud: As with other financial instruments, there is a risk of an NBFC sharing false information at the time of investment. In such a scenario, legal actions will be taken against those involved, but the money invested in such bonds might take a while to be recovered or be unrecoverable in some cases.

Question 9

Are my investments safe with Wint Wealth?

Accepted Answer

Apart from the risks associated with investing in bonds itself, there are no additional risks in investing through Wint Wealth. Furthermore, Wint Wealth has stringent criteria when it comes to curating bonds that mitigate such risks. From ₹500 Cr. worth of bonds that we have brought to the platform, there have been 0% defaults till now.

Question 10

Is my investment safe even if Wint Wealth shuts down?

Accepted Answer

Yes, your investment will be safe even if Wint Wealth shuts down. Once you invest in a bond with Wint Wealth, the bond units are transferred to your Demat account and will remain unaffected in such a scenario.

Question 11

Is TDS deducted when I invest in bonds?

Accepted Answer

There is no TDS deducted when you invest in the listed bonds that go live on our platform. However, on investing in unlisted bonds, there is a 10% TDS deduction on the interest by the Issuer as per Section 193 (TDS from Interest on Securities) of the Income Tax Act. Please note: TDS will be deducted only on the interest you earn and not on the face value.

Question 12

Once a bond matures, where will I receive the maturity amount?

Accepted Answer

From the time you invest in a bond, all principal repayments and interest payments will be directly sent to the bank account that is linked to your Demat account. Since the payments are made periodically, all individual payments will reflect in your Demat-linked bank account at the time of maturity.

Question 13

When do I receive the bond units in my Demat account?

Accepted Answer

Once your investment is successful, the bond units are transferred to your Demat account within 5 working days.

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I have already invested in mutual funds, equity, and FDs. Why should I invest in bonds?

What are bonds?

How does the debt market work exactly?

What are Senior Secured Bonds?

What is the minimum amount required to invest in bonds?

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