Is NCD safe?

NCD investments are comparatively safer than other securities as they are rated by credit rating agencies and are low risk instruments. NCDs offer investors above-average returns, liquidity, low risk, and tax benefits.

The companies offer interest to the investors for the amount invested. Irrespective of the market sentiments, the investors receive fixed amounts at regular intervals or at maturity. On maturity, the investors receive the principal amount. Thus, the investors are assured to receive more than the invested amount unlike Equity wherein the share prices can drop or rise.

However, before investing in NCDs, investors must consider the NCDs' rating, the company's financial performance, risk factors, interest rate, effective yield, and maturity information.