What is the Face Value of Non-Convertible Debentures (NCDs)?


When you start investing in Non-Convertible Debentures (NCDs), it is crucial to familiarize yourself with fundamental concepts that play a crucial role in these financial instruments. Among these concepts, the term face value, often referred to as the ‘par value,’ holds a significant role.

Understanding the implications of face value is important and helps investors to make informed decisions and take advantage of NCDs.

What is Face Value?

At its core, the face value of an NCD symbolizes the starting point of the investment journey. It signifies the principal amount for which the debenture is originally issued by the company. This initial value serves as a foundation upon which various aspects of the NCD are built, including the calculation of interest payments and the repayment to investors at the NCD’s maturity.

Face value plays a pivotal role in shaping the financial dynamics of NCDs. It acts as a reference point for determining the fixed interest payments that any issuing company makes to its investors over the course of the NCD's tenure.

These regular interest payments are often disbursed monthly, quarterly, or annually, and offer the investors a regular stream of income throughout the life of the debenture.

Moreover, the face value has a direct impact on the final payback that investors receive when the NCD reaches maturity. As the investment journey concludes, the face value dictates the principal amount that is returned to the investor, signifying the completion of the investment cycle.

What do you get with Muthoot FinCorp ONE NCDs?

With Muthoot FinCorp NCDs, you gain access to a range of valuable benefits that can enhance your investment experience. Firstly, these NCDs offer higher interest rates compared to traditional savings accounts or fixed deposits, potentially leading to greater earnings for you. This means your money works harder, allowing you to make the most of your investment.

Additionally, Muthoot FinCorp's NCDs provide you with a dependable source of regular income. Just like receiving pocket money at regular intervals, NCDs pay you interest on a schedule – whether it's monthly, quarterly, or yearly. This consistent income stream can contribute to your financial stability and help you meet your financial goals.

Moreover, investing in Muthoot FinCorp's NCDs allows you to diversify your investment portfolio. By spreading your funds across different types of investments, you can reduce risks and potentially enhance your overall returns. Plus, with fixed tenure, you have a clear understanding of when you'll receive your money back. This fixed time frame facilitates better financial planning, enabling you to align your investment with your future needs.

Muthoot FinCorp's NCDs also come with the advantage of a good credit rating, indicating our reliability as an investment option. Higher ratings translate to increased safety for your investment. Lastly, there might be potential tax benefits associated with NCDs, potentially reducing the amount of tax you pay on the interest you earn.

Understanding face value is key when dealing with NCDs. It's like the starting point for your investment journey. Muthoot Fincorp's NCDs offer a simple way to earn more from your money. They give you higher interest, a steady income, and a chance to diversify your investments. If you're interested, consider giving them a try. Just remember, it's essential to research, understand, and plan before making any financial decision.

Muthoot FinCorp ONE, as an SBU of Muthoot FinCorp Limited, is a one-stop solution for your finances. With a legacy spanning over 135 years and the trust of more than 1 crore customers, you can be confident that when you are with Muthoot FinCorp ONE, you are with the best in the business.

So what are you waiting for? Head to the Play Store and download the Muthoot FinCorp ONE app. You can also visit the website today to know more.

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