What is NCD (Non-Convertible Debenture)?
NCD is the abbriviation for Non-Convertible Debenture. It is a type of debt instrument issued by a company to raise capital from its investors. NCDs offer fixed interest rates and a specific maturity period, during which the issuing company pays regular and fixed interest payments to its debenture holders. Unlike the regular convertible debentures, you cannot convert NCDs into equity shares.Investors in NCDs receive their interest income periodically. These are monthly, quarterly, or annually, depending on the terms of the debenture. At the end of the NCD maturity period, the issuing company then returns the principal amount to its debenture holders.
Benefits of investing in Muthoot FinCorp Ltd’s NCD?
Higher interest rates:Muthoot FinCorp Ltd.'s NCDs generally offer higher interest rates compared to traditional fixed deposit schemes or savings accounts available in the market. With an investment in NCD, you can potentially get higher returns on your investment.
Regular income:NCDs have periodic interest payouts, which can be monthly, quarterly, or annually. This can be beneficial if you are seeking a regular income stream from your investments.
Diversification:Investing in Muthoot FinCorp Ltd.'s NCDs can diversify your investment portfolio as they provide an alternative investment avenue to stocks, mutual funds, and other traditional investment options.
Fixed tenure: NCDs have fixed tenure, ranging from a few months to several years. This allows you to align your investments with your financial goals and choose the tenure that suits your requirement.
High credit rating:Muthoot FinCorp Ltd. NCDs are assigned credit ratings by established credit rating agencies. A higher credit rating indicates the issuer's ability to meet its financial obligations.
Liquidity:Muthoot FinCorp Ltd. NCDs are listed on stock exchanges, which provides liquidity to investors. If you need funds before the maturity of NCD, you have the option to sell them on the stock exchange. Please note that this is, subject to market conditions and demand.
Tax efficiency:NCDs may offer tax advantages depending on the prevailing tax regulations the country. Interest income from NCDs is generally taxable, but you may benefit from certain deductions or exemptions.
How to invest in NCDs?
You can invest in NCDs either through the Muthoot FinCorp ONE app or website. all you have to do is:
- 1.Log in to the Muthoot FinCorp ONE app or website
- 2.Select NCD Investments
- 3.Provide your email address and PAN.
- 4.Select from the available NCD series
- 5.Provide your DEMAT account details (please ensure it is linked to your PAN)
- 6.Provide the UPI address (VPA)
- 7.Click to submit your application
What is the face value of NCD?
The face Value of an NCD refers to the nominal or par value of the debenture. It is the initial value at which the debenture is issued and represents the principal amount that will be repaid to the debenture holder at the time of its maturity.
Do I need to complete my KYC to invest in NCD?
No, KYC is not required to invest in NCD.
What is the minimum and maximum amount that I can invest?
You can invest in NCD with as little as Rs. 10,000 and a maximum value of upto Rs. 5,00,000 through UPI. To make an investment higher than Rs. 5,00,000 please visit the nearest Muthoot FinCorp branch. Please note that it is mandatory to have a DEMAT account to invest in NCD.
How to invest in NCD through Muthoot FinCorp Ltd. branch?
You can also visit your nearest Muthoot FinCorp Ltd. branch to make an NCD investment. Here a branch associate will help you in filling out the application form and complete the necessary steps. Please ensure that you carry your PAN and DEMAT account number and bank account details (Please note that it is mandatory to have a DEMAT account to invest in NCD).
Can I apply multiple times for NCD ?
Yes, you can apply multiple times through the app and website, however, you can only apply for one option once. Also, there is a cumulative maximum investment limit of Rs. 5,00,000. For example, if you apply first for Option 1 with Rs. 2,00,000 as investment, in the second application you can choose all the available Options apart from Option 1 and invest up to Rs. 3,00,00 while doing so.
Can I cancel my application?
Yes, you can cancel your application anytime when the bidding window is open. It might usually take upto 24 working hours to receive confirmation post submitting cancellation request.