What are Perpetual Bonds and why should you buy them?

What Are Perpetual Bonds?

Perpetual Bonds or Perps are fixed income securities that do not have a maturity date.

What Are Perpetual Bonds?

Issuers usually keep a Call Option Date wherein they can redeem the bond if they wish to.

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Risks 

Possibility of Funds getting blocked. They carry risks associated with equity share holders.

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Risks 

Likelihood of redemption on Call Option date.

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Benefits 

Lowers reinvestment risk.  Provides high yield and coupon rate.

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Provides regular source of income. Better yield than regular Fixed Deposits.

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Benefits 

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Perpetual Bonds available to buy right now

MUTHOOT FINCORP LIMITED

Rating – A by Crisil

Call Option Year

2032

Interest Rate Current Yield

12.00% 11.30% 10 Lakhs

Minimum Investment

TATA MOTORS FINANCE SOLUTIONS LTD

Rating – A by Crisil

Call Option Year

2032

Interest Rate Current Yield

9.23% 9.10% 10 Lakhs

Minimum Investment

INDUSIND BANK LTD

Rating – A by Crisil

Call Option Year

2032

Interest Rate Current Yield

10.50% 8.55% 10 Lakhs

Minimum Investment

STATE BANK OF INDIA

Rating – A by Crisil

Call Option Year

2032

Interest Rate Current Yield

8.50% 7.25% 10 Lakhs

Minimum Investment

SOUTH INDIAN BANK LIMITED

Rating – A by Crisil

Call Option Year

2032

Interest Rate Current Yield

13.75% 13.00% 10 Lakhs

Minimum Investment

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