Difference between bonds, debenture and deposits

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21 April 2014 Pls can anybody tell me

Difference between bonds, debenture and deposits

Nikhil Kaushik

Nikhil Kaushik (Expert)
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21 April 2014 Difference between Bond and Debentures:

Bonds are more secure than debentures. As a debenture holder, you provide unsecured loan to the company. It carries a higher rate of interest as the company does not give any collateral to you for your money. For this reason bond holders receive a lower rate of interest but are more secure.

If there is any bankruptcy, bondholders are paid first and the liability towards debenture holders is less.

Debenture holders get periodical interest on their money and upon completion of the term they get their principal amount back.

Bond holders do not receive periodical payments. Rather, they get principal plus interest accrued upon the completion of the term. They are much more secure than debentures and are issued mostly by government firms.

Source: https://www.differencebetween.com/difference-between-bond-and-debenture/#ixzz2zSZMce8F

While deposits are also fixed interest bearing instruments, they are generally totally unsecured and therefore offer no security to the subscriber.

you should refer to https://www.moneycontrol.com/news/fixed-income-bank-deposits/should-one-opt-for-bonds-or-fixed-deposits_974462.html for a broader understanding

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