Hi thankyou for your views.
If a person is in 30% tax bracket then he pays the same % of tax on FD and bond interest earnings. I am not very good at tax so might be wrong here. Just scroll through this thread people have discussed about TAX. So bond and FD are taxed as per your tax slab. When I say bond it is only the interest you get.
Secondly this topic was made when the 10 yrs bond was at a 7.3% of yield and made a high of 7.6% there after it made a low of 7.1% and currently at 7.3%. My overall view here was that in the next 2yrs they are bound to go below their coupon rate unless there is another war. So in the short term they might go up. If you see are CPI inflation has been falling from last 2 months and this time there was another 50bps hike. I am not an economist but I feel is that the yield might not go above 7.8% 20bps high from previous high. So if you entered at 7.45% or 7.5% then you are at a good position.
The biggest benefit here is that you will end up with capital gains unlike in FD. We were at 8yrs high inflation such situation comes once in a decade. So such yield also comes once in a decade. In the next 2 yrs you might end up with good capital gains here and interest as well. The good part is they are tradable in market unlike FD so you can sell them as well.
This place can be further explored. Like you can buy debentures of companies with stable performance where there is not much growth. Like the companies whose earnings are flat. Why because earnings being flat does not mean it is a bad company but these companies issue debentures at 13% or 15%. So you know that the company cannot go bankrupt moreover because of flattish earnings you get higher yield.
So investing 15 to 20% of your portfolio and making 10% to 15% interest is a good idea. So making 10 to 15% let say for 10yrs consistently on 15 to 20% of your portfolio is decent.
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