What is NCD (Non Convertible Debentures)? - YouTube

Hello Friends, today we will talk about NCD means Non Convertible Debentures.

It is a debt instrument.Debt here means a fixed income the way you get in bank fixed deposit.

These are non convertible debentures which means you cannot convert this in equity shares

NCD is a very safe option for you to invest and you also get a lot of profit in it.

Huge Gain means that in NCD you get so much profit that you never get in fixed deposit.

NCD are of two types, First is Secured NCD and Second is Unsecured NCD.

Secured NCD are completely secured,

which means there are no chances of being a defaulter of the company and your money is safe.

There is no security of the company in Unsecured NCD

which means they are not safe. In this company can become a defaulter as well.

Now let's talk about what happens in NCD and how do we make money in it.

In this you buy the debentures from the company and in return you give the money to the company.

Suppose a company needs a fund through which a company can grow their business in the market.

So the company issues their debentures in the market, which is worth Rs.1000 from the price of the purchase.

Any company issues its debentures only for a fixed time.

So friends, now let’s know how do we get a good interest or a good profit in NCD

The first thing is that the company gives the principal amount

And the interest earned through it to the investor at the time of the maturity.

Here, company pays you interest in 3 ways

First Monthly which means every month, Second Quarterly means every 3 months

And annually means every year.

If you did not take interest at the end or at the time of maturity,

then you get your money together with the interest.

Come let’s know about how can we invest in NCD?

So there is an old saying first come first serve so you get the allotment on the first come first serve basis.

NCD issues will have options of 2 years, 3 years, 5 years and 10 years in which you can invest as per you wish.

Now the question is how we buy NCD.

So friends you can buy a NCD through your Demat Account.

If you do not have a Demat Account so open a Demat account today only or call on the given number.

Now come the benefits of investing in NCD

First it gives you higher rate of return than fixed deposit.

Second the more time we keep our money invested the more we get the money from the NCD.

Even if the interest rate is down you get the profit on your principal amount.

Now let’s talk about our last question which is how to sell your NCD after maturity?

So you have two ways to sell your NCD

First is you can sell your NCD through Share Market

and second you can sell the NCD directly to buyer as well.

In order to sell your NCD in the share market,

first you will have to get your debentures into Demat

then contact your broker with whom you have your Demat a/c

and inform him that you want sell your debentures

In Direct transfer you will have to look for a buyer on your own

then inform the company about your intention to sell.

Now if we talk about Tax so if you sell your NCD before 1 years then you would have to pay the TAX.

Thank you friends,

I hope you got a lot of information through this video

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