Here Is How And Why To Invest In Fixed-Income

Knowing one’s risk profile is crucial before investing money. At times you may not want to take risk while depending on the risk appetite, you may be willing to take volaility of returns in your stride.

There are fixed-income investments providing an assured return while there are other investments which provide returns linked to market. The decision to choose between fixed and market-linked investments is fairly simple. For a financial goal that is still few years away, the reason to take risk might still exist while for goals that needs to be met within few months or 2-3 years, taking risk with money is not suggested.

For investors, the choice between fixed-income investments and market-linked investments becomes more pronounced when it comes to meeting goals. Both fixed-income and market-lined investments have a role to play in creating wealth and achieving goals. Let’s see what they are and how different investment avenues may be put to use while chasing goals.

Fixed-income investments

Interest-bearing investments such as bank fixed deposits, company deposits, post office small savings products and bonds are popular among fixed-income investors. They come with a fixed return and a pre-decided maturity period. They, therefore, belong to the debt-asset class.