- Wealth PMS (50L+)
In part 2 of our Bonds Tutorial, we will calculate how to see the return for a bond over multiple years.
See: Part 1: What are bonds and how to buy them online?
A bond is complex. You pay to buy it. Then it gives you money back. The money you get back is paid as interest (every year or so) and then, at the end, you get the "principal" back. Bonds can have crazy intermediate structures like paying back 40% of principal in year 5 and the remaining 60% in year 7 and so on.
How do you calculate this return? And in effect, how does this compare with a pure fixed deposit?