What are Perpetual Bonds

Perpetual Bonds Meaning

There are hundreds of products to invest in the stock market. With so many investment options, it is very difficult to choose where to invest. However, generally, all investors choose where to invest based on the return expectation from the market and risk appetite. And in this episode today I will tell you about Perpetual Bond because it is also considered a good investment option.

What is Perpetual Bond —: Perpetual Bond is also known as an AT1 bond or Tier 1 bond. In these bonds, one-time money is taken from the investors, and after that only interest is paid to them. The investors who buy these bonds are not given back the principal amount, but if required, investors can sell these bonds in the open market. These bonds do not have a maturity date so they never expire.

Perpetual Bonds are regulated by RBI, these bonds are issued by banks, big companies. The main purpose of issuing them is to arrange capital for the long term. These are permanent bonds that never expire. These have higher interest rates than non-permanent bonds.

The investor cannot return these bonds from where they have been purchased, but the issuing banks and companies have the right to recall these bonds if they wish and in return, their principal amount can be returned to the investors. Is.

Perpetual Bonds are considered suitable for long-term investments. Most of the Perpetual Bonds are also listed on the stock exchange, you can buy and sell them from there as well. The main risk involved in investing in these bonds is liquidity, inflation, and changes in interest rates. Before investing in these bonds, do thorough research and consult your investment advisor.

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