Debt market Instrument

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Debt market Instrument

Types of Debt Market Instruments

Government of India Securities

These are bonds backed by the government (so they're low risk) that pay regular interest. Here are the main features:

  • Interest payments are fixed and made every six months.
  • They can have short to long-term maturity dates, from less than a year to up to twenty years.
  • You can buy them when they're first issued or later from other investors.
  • You can sell them in the market at the going rate.
  • You can keep in paper form or electronically in a Constituents Subsidiary General Ledger (CSGL) account with any bank.
  • If you keep them in a CSGL account , you'll automatically get your half-yearly interest payments and  redemption proceeds when the bond matures.
  • They generally offer decent returns.
Government of India Securities

Treasury Bills

These are shortboards sold at a discount (less than their face value). Key points about T-Bills are:

  • They're backed by the Government.
  • They are short-term, with a maximum tenure of 364 days.
  • Like government securities, you can buy them when issued or later from others.
  • You get the total face value when they mature, even though you pay less initially.
  • There's no tax deducted at the source (TDS) on the interest you earn.
  • They're highly liquid.
  • They typically provide good returns.
Treasury Bills

Commercial Paper

These are short-term unsecured promissory notes issued by leading companies, primary dealers (PDs), satellite dealers (SDs) and all-India financial institutions (FIs). The main features of these papers are:

  • Corporates with a tangible net worth of not less than ₹4 crores and whose borrowable account is classified as a Standard Asset by financing banks are eligible to issue CPs.
  • All CPs must have a credit rating. The highest rating is P1+ and lowest is P-2 by CRISIL.
  • Minimum period of 15 days and a maximum up to one year.
  • Minimum amount of investment is ₹5 lakh or multiples thereof
  • Issued at a discount to face value.
  • Compulsory demat
  • Enjoy attractive returns.

For more details, write to us at mmdesk.bombay@hdfc.bank.in

Commercial Paper

More About Debt Market Instruments

When managing your money, finding the right balance between risk and returns and how easily you can access your funds is essential. That's where the HDFC Bank Money Market Desk comes in. They offer different debt investments, like government securities, treasury bills (T-Bills) and commercial paper. These options help you make smart choices to grow your savings while keeping your money safe and available when needed.

*The Most Important Terms and Conditions for each of our banking offerings features all the specific terms and conditions that govern their use. You must go through it thoroughly to fully understand the terms and conditions applicable to any banking product you choose.

Frequently Asked Questions

Debt Market Instruments are fixed-income assets that allow lenders to earn a fixed interest rate on their investment, along with the principal amount. These instruments provide a predictable income stream to investors and are typically used by governments and corporations to raise capital. Debt instruments can be secured or unsecured, and they offer a range of benefits, including attractive returns and safety from market volatility. Some of the debt market instruments include government bonds, corporate bonds and T-Bills.

 An example of a Debt Instrument is a corporate bond. It’s a type of security a corporation issues to raise capital, promising to pay it back with interest.

The most common type of Debt Instrument is government bonds. It’s considered a safe investment, as the government’s credit backs it.

Debt Market Instruments offer predictable returns and flexibility in managing cash flows and investment positions. They provide diversification and are a good option for conservative investors. Some debt instruments like Government securities exhibit less price volatility, making them a popular choice for investors seeking stability.

To apply for Debt Market Instruments, contact HDFC Bank’s Money Market Desk or visit the official website to explore options and complete the application process.