Financial instruments known as “fixed-income investments” offer a consistent income stream over a predetermined period. These investments are used to diversify a portfolio and protect it from market volatility because they are typically regarded as low-risk. Despite the fact that these investments are frequently viewed as conservative, they can still produce impressive returns and be a great way to accumulate wealth. In this article, we will explore the benefits of fixed income investments over fixed deposits and discuss the different types of fixed income products available to investors.
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Fixed-income investments are investments that provide a steady stream of income, usually in the form of interest payments, over a set period of time. These investments are generally considered to be low-risk, as they offer a predictable return that is not subject to the volatility of the stock market. Fixed-income investments can be used to diversify a portfolio, as they are less risky than equities and can provide a steady stream of income.
Examples of fixed-income investments include bonds, Fixed deposits (FDs), treasury notes, and money market accounts. Bonds are a type of debt security that are issued by corporations or governments, and they usually have a fixed interest rate and a set maturity date. FDs are time deposits offered by banks and other financial institutions and usually have a fixed interest rate and a set maturity date. Treasury notes are debt securities issued by the United States government, and they usually have a fixed interest rate and a set maturity date. Money market accounts are savings accounts that offer a higher rate of interest than traditional savings accounts, and they usually have a fixed interest rate and a set maturity date.