{"id":8142,"date":"2024-06-19T13:11:44","date_gmt":"2024-06-19T13:11:44","guid":{"rendered":"https:\/\/goldenpi.com\/blog\/?p=8142"},"modified":"2024-11-04T16:18:14","modified_gmt":"2024-11-04T16:18:14","slug":"psu-bonds-definition-type-and-benefits","status":"publish","type":"post","link":"https:\/\/goldenpi.com\/blog\/psu-bonds\/psu-bonds-definition-type-and-benefits\/","title":{"rendered":"PSU Bonds: Definition, Type and Benefits"},"content":{"rendered":"<p><span style=\"font-weight: 400;\">Low chances of default are the major lookout for investors when investing, besides high interest rates. Sovereign backing reduces the risk level involved in investment instruments to a great extent. Given their low risk and consistent returns, many investors find government bonds to be an attractive option. This security explains the popularity of government bonds among all sorts of investors and the introduction of their many types. One of the most appealing options available is <a href=\"https:\/\/goldenpi.com\/blog\/fixed-income\/govt-bonds\/government-bonds-for-senior-citizens\/\" target=\"_blank\" rel=\"noopener noreferrer\">Government Bonds for Senior Citizens<\/a>, designed to provide a steady income stream and financial security during retirement. While the central and state governments, along with local government bodies, issue many bonds, the PSU sector also has several alluring offerings for investors.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">The basic concept of <\/span><b>PSU bonds<\/b><span style=\"font-weight: 400;\"> is not different from the bonds issued by other government entities. That said, there are distinct features of PSU bonds to explore. Read along to get a proper definition and a better understanding of PSU bonds, their categorization, and their benefits. We will further delve into the list of top PSU bonds for 2024 and draft an easy investment guide!<\/span><\/p>\n<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_79_2 counter-hierarchy ez-toc-counter ez-toc-grey ez-toc-container-direction\">\n<div class=\"ez-toc-title-container\">\n<p class=\"ez-toc-title\" style=\"cursor:inherit\">Table of Contents<\/p>\n<span class=\"ez-toc-title-toggle\"><a href=\"#\" class=\"ez-toc-pull-right ez-toc-btn ez-toc-btn-xs ez-toc-btn-default ez-toc-toggle\" aria-label=\"Toggle Table of Content\"><span class=\"ez-toc-js-icon-con\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #999;color:#999\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #999;color:#999\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/span><\/a><\/span><\/div>\n<nav><ul class='ez-toc-list ez-toc-list-level-1 ' ><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/goldenpi.com\/blog\/psu-bonds\/psu-bonds-definition-type-and-benefits\/#Defining_PSU_Bonds\" >Defining PSU Bonds<\/a><ul class='ez-toc-list-level-3' ><li class='ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/goldenpi.com\/blog\/psu-bonds\/psu-bonds-definition-type-and-benefits\/#Features_of_PSU_Bonds\" >Features of PSU Bonds<\/a><ul class='ez-toc-list-level-4' ><li class='ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/goldenpi.com\/blog\/psu-bonds\/psu-bonds-definition-type-and-benefits\/#Tenure\" >Tenure<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-4\" href=\"https:\/\/goldenpi.com\/blog\/psu-bonds\/psu-bonds-definition-type-and-benefits\/#Interest_Rates\" >Interest Rates<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-5\" href=\"https:\/\/goldenpi.com\/blog\/psu-bonds\/psu-bonds-definition-type-and-benefits\/#Liquidity\" >Liquidity<\/a><\/li><\/ul><\/li><\/ul><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-6\" href=\"https:\/\/goldenpi.com\/blog\/psu-bonds\/psu-bonds-definition-type-and-benefits\/#Types_of_PSU_Bonds\" >Types of PSU Bonds<\/a><ul class='ez-toc-list-level-3' ><li class='ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-7\" href=\"https:\/\/goldenpi.com\/blog\/psu-bonds\/psu-bonds-definition-type-and-benefits\/#Fixed-Rate_Bonds\" >Fixed-Rate Bonds<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-8\" href=\"https:\/\/goldenpi.com\/blog\/psu-bonds\/psu-bonds-definition-type-and-benefits\/#Floating-Rate_Bonds\" >Floating-Rate Bonds<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-9\" href=\"https:\/\/goldenpi.com\/blog\/psu-bonds\/psu-bonds-definition-type-and-benefits\/#Inflation-Indexed_Bonds\" >Inflation-Indexed Bonds<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-10\" href=\"https:\/\/goldenpi.com\/blog\/psu-bonds\/psu-bonds-definition-type-and-benefits\/#Zero-Coupon_Bonds\" >Zero-Coupon Bonds<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-11\" href=\"https:\/\/goldenpi.com\/blog\/psu-bonds\/psu-bonds-definition-type-and-benefits\/#Bonds_with_Call_and_Put_option\" >Bonds with Call and Put option<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-12\" href=\"https:\/\/goldenpi.com\/blog\/psu-bonds\/psu-bonds-definition-type-and-benefits\/#Tax-Free_Bonds\" >Tax-Free Bonds<\/a><\/li><\/ul><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-13\" href=\"https:\/\/goldenpi.com\/blog\/psu-bonds\/psu-bonds-definition-type-and-benefits\/#Benefits_of_PSU_Bonds\" >Benefits of PSU Bonds<\/a><ul class='ez-toc-list-level-3' ><li class='ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-14\" href=\"https:\/\/goldenpi.com\/blog\/psu-bonds\/psu-bonds-definition-type-and-benefits\/#Low_Risk\" >Low Risk<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-15\" href=\"https:\/\/goldenpi.com\/blog\/psu-bonds\/psu-bonds-definition-type-and-benefits\/#Higher_Returns\" >High(er) Returns<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-16\" href=\"https:\/\/goldenpi.com\/blog\/psu-bonds\/psu-bonds-definition-type-and-benefits\/#Regular_Income\" >Regular Income<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-17\" href=\"https:\/\/goldenpi.com\/blog\/psu-bonds\/psu-bonds-definition-type-and-benefits\/#Long-Term_Investment_Value\" >Long-Term Investment Value<\/a><\/li><\/ul><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-18\" href=\"https:\/\/goldenpi.com\/blog\/psu-bonds\/psu-bonds-definition-type-and-benefits\/#Who_Should_Invest_in_PSU_Bonds\" >Who Should Invest in PSU Bonds<\/a><ul class='ez-toc-list-level-3' ><li class='ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-19\" href=\"https:\/\/goldenpi.com\/blog\/psu-bonds\/psu-bonds-definition-type-and-benefits\/#Risk-Averse_Investors\" >Risk-Averse Investors<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-20\" href=\"https:\/\/goldenpi.com\/blog\/psu-bonds\/psu-bonds-definition-type-and-benefits\/#Investors_Looking_for_Portfolio_Diversification\" >Investors Looking for Portfolio Diversification<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-21\" href=\"https:\/\/goldenpi.com\/blog\/psu-bonds\/psu-bonds-definition-type-and-benefits\/#Investors_Seeking_Regular_Income\" >Investors Seeking Regular Income<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-22\" href=\"https:\/\/goldenpi.com\/blog\/psu-bonds\/psu-bonds-definition-type-and-benefits\/#Investors_Requiring_Long-Term_Investment_Tools\" >Investors Requiring Long-Term Investment Tools<\/a><\/li><\/ul><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-23\" href=\"https:\/\/goldenpi.com\/blog\/psu-bonds\/psu-bonds-definition-type-and-benefits\/#List_of_Top_PSU_Bonds_to_Invest_in_2024\" >List of Top PSU Bonds to Invest in 2024<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-24\" href=\"https:\/\/goldenpi.com\/blog\/psu-bonds\/psu-bonds-definition-type-and-benefits\/#Invest_in_PSU_Bonds_with_GoldenPi\" >Invest in PSU Bonds with GoldenPi<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-25\" href=\"https:\/\/goldenpi.com\/blog\/psu-bonds\/psu-bonds-definition-type-and-benefits\/#FAQs_About_PSU_Bonds_Definition_Type_and_Benefits\" >FAQs About PSU Bonds: Definition, Type and Benefits<\/a><ul class='ez-toc-list-level-3' ><li class='ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-26\" href=\"https:\/\/goldenpi.com\/blog\/psu-bonds\/psu-bonds-definition-type-and-benefits\/#1_Is_PSU_a_government_company\" >1. Is PSU a government company?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-27\" href=\"https:\/\/goldenpi.com\/blog\/psu-bonds\/psu-bonds-definition-type-and-benefits\/#2_What_are_the_main_types_of_bonds\" >2. What are the main types of bonds?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-28\" href=\"https:\/\/goldenpi.com\/blog\/psu-bonds\/psu-bonds-definition-type-and-benefits\/#3_What_are_PSU_bonds_in_India\" >3. What are PSU bonds in India?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-29\" href=\"https:\/\/goldenpi.com\/blog\/psu-bonds\/psu-bonds-definition-type-and-benefits\/#4_Why_are_PSU_bonds_investor-friendly\" >4. Why are PSU bonds investor-friendly?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-30\" href=\"https:\/\/goldenpi.com\/blog\/psu-bonds\/psu-bonds-definition-type-and-benefits\/#5_What_are_the_features_of_public_sector_bonds\" >5. What are the features of public sector bonds?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-31\" href=\"https:\/\/goldenpi.com\/blog\/psu-bonds\/psu-bonds-definition-type-and-benefits\/#6_How_to_invest_in_the_public_sector_undertaking_bonds\" >6. How to invest in the public sector undertaking bonds?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-32\" href=\"https:\/\/goldenpi.com\/blog\/psu-bonds\/psu-bonds-definition-type-and-benefits\/#7_Are_public_sector_undertaking_bonds_safe\" >7. Are public sector undertaking bonds safe?<\/a><\/li><\/ul><\/li><\/ul><\/nav><\/div>\n\n<h2><span class=\"ez-toc-section\" id=\"Defining_PSU_Bonds\"><\/span><strong>Defining PSU Bonds<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p><img decoding=\"async\" class=\"aligncenter wp-image-8171 size-full\" src=\"https:\/\/d2zny4996dl67j.cloudfront.net\/blogs\/wp-content\/uploads\/2024\/06\/27041834\/Defining-PSU-Bonds.jpg\" alt=\"Defining PSU Bonds\" width=\"1160\" height=\"550\" srcset=\"https:\/\/d2zny4996dl67j.cloudfront.net\/blogs\/wp-content\/uploads\/2024\/06\/27041834\/Defining-PSU-Bonds.jpg 1160w, https:\/\/d2zny4996dl67j.cloudfront.net\/blogs\/wp-content\/uploads\/2024\/06\/27041834\/Defining-PSU-Bonds-300x142.jpg 300w, https:\/\/d2zny4996dl67j.cloudfront.net\/blogs\/wp-content\/uploads\/2024\/06\/27041834\/Defining-PSU-Bonds-1024x486.jpg 1024w, https:\/\/d2zny4996dl67j.cloudfront.net\/blogs\/wp-content\/uploads\/2024\/06\/27041834\/Defining-PSU-Bonds-768x364.jpg 768w, https:\/\/d2zny4996dl67j.cloudfront.net\/blogs\/wp-content\/uploads\/2024\/06\/27041834\/Defining-PSU-Bonds-585x277.jpg 585w\" sizes=\"(max-width: 1160px) 100vw, 1160px\" \/><\/p>\n<p><b>PSU bonds full form<\/b><span style=\"font-weight: 400;\"> is Public Sector Undertaking bonds. PSUs are entities where the central or any state government of India has 51% or more stake. Considering the <\/span><b>PSU definition<\/b><span style=\"font-weight: 400;\">, it can be a PSU bank, a power sector company, the railways, a housing corporation, and so on. The PSU bonds are basically a loan agreement between the investors and the PSU. The investors invest in the bonds, i.e., loan an amount to the PSU. In return, the PSU generates interest at fixed rates and makes semi-annual or annual payments on the same. The principal investment amount is credited to the investors\u2019 accounts on maturity.<\/span><\/p>\n<h3><span class=\"ez-toc-section\" id=\"Features_of_PSU_Bonds\"><\/span><strong>Features of PSU Bonds<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p><span style=\"font-weight: 400;\">The key features of PSU bonds to remember when making investment strategies are listed below.<\/span><\/p>\n<h4><span class=\"ez-toc-section\" id=\"Tenure\"><\/span><b>Tenure<\/b><span class=\"ez-toc-section-end\"><\/span><\/h4>\n<p><span style=\"font-weight: 400;\"><a href=\"https:\/\/goldenpi.com\/collections\/psu-bonds\" target=\"_blank\" rel=\"noopener noreferrer\">PSU bonds<\/a> are generally considered long-term investments. The maturity period can range from 5 years to 10 years, sometimes going up to 15 years.\u00a0<\/span><\/p>\n<h4><span class=\"ez-toc-section\" id=\"Interest_Rates\"><\/span><b>Interest Rates<\/b><span class=\"ez-toc-section-end\"><\/span><\/h4>\n<p><span style=\"font-weight: 400;\">The interest rates of PSU bonds are mostly fixed throughout the tenure. The rates vary based on the issuer, which can go up to <\/span><span style=\"font-weight: 400;\">8.42%<\/span><span style=\"font-weight: 400;\">.<\/span><\/p>\n<h4><span class=\"ez-toc-section\" id=\"Liquidity\"><\/span><b>Liquidity<\/b><span class=\"ez-toc-section-end\"><\/span><\/h4>\n<p><span style=\"font-weight: 400;\">While the lock-in period is quite long, the bondholders can enjoy adequate liquidity because PSU bonds are tradable in the secondary market.<\/span><\/p>\n<h2><span class=\"ez-toc-section\" id=\"Types_of_PSU_Bonds\"><\/span><strong>Types of PSU Bonds<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p><img decoding=\"async\" class=\"aligncenter wp-image-8453 size-full\" src=\"https:\/\/d2zny4996dl67j.cloudfront.net\/blogs\/wp-content\/uploads\/2024\/06\/24110953\/Types-of-PSU-Bonds-1.jpg\" alt=\"Types-of-PSU-Bonds\" width=\"1160\" height=\"550\" srcset=\"https:\/\/d2zny4996dl67j.cloudfront.net\/blogs\/wp-content\/uploads\/2024\/06\/24110953\/Types-of-PSU-Bonds-1.jpg 1160w, https:\/\/d2zny4996dl67j.cloudfront.net\/blogs\/wp-content\/uploads\/2024\/06\/24110953\/Types-of-PSU-Bonds-1-300x142.jpg 300w, https:\/\/d2zny4996dl67j.cloudfront.net\/blogs\/wp-content\/uploads\/2024\/06\/24110953\/Types-of-PSU-Bonds-1-1024x486.jpg 1024w, https:\/\/d2zny4996dl67j.cloudfront.net\/blogs\/wp-content\/uploads\/2024\/06\/24110953\/Types-of-PSU-Bonds-1-768x364.jpg 768w, https:\/\/d2zny4996dl67j.cloudfront.net\/blogs\/wp-content\/uploads\/2024\/06\/24110953\/Types-of-PSU-Bonds-1-585x277.jpg 585w\" sizes=\"(max-width: 1160px) 100vw, 1160px\" \/><\/p>\n<p><span style=\"font-weight: 400;\">The following are the most popular <\/span><a href=\"https:\/\/goldenpi.com\/blog\/psu-bonds\/psu-bonds-definition-type-and-benefits\/\"><b>types of bonds in India<\/b><\/a><span style=\"font-weight: 400;\"> offered by PSUs.<\/span><\/p>\n<h3><span class=\"ez-toc-section\" id=\"Fixed-Rate_Bonds\"><\/span><strong>Fixed-Rate Bonds<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p><span style=\"font-weight: 400;\">The rate of interest in these PSU bonds remains the same throughout the tenure. The issuer announces the rate during the issuance and provides interest payouts at the same rate. This type of bond offers more stability in terms of returns and makes financial planning more predictable.<\/span><\/p>\n<h3><span class=\"ez-toc-section\" id=\"Floating-Rate_Bonds\"><\/span><strong>Floating-Rate Bonds<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p><span style=\"font-weight: 400;\">The idea of investments with a floating rate is connected to the market rates, where the instrument offers interest at the changeable ongoing rates instead of a pre-fixed rate. It allows investors to take advantage of the increasing market rates.\u00a0<\/span><\/p>\n<h3><span class=\"ez-toc-section\" id=\"Inflation-Indexed_Bonds\"><\/span><strong>Inflation-Indexed Bonds<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p><span style=\"font-weight: 400;\">The accumulated interest and the <a href=\"https:\/\/www.investopedia.com\/terms\/p\/principal.asp\" target=\"_blank\" rel=\"noopener noreferrer\">principal investment amount<\/a> are linked to the CPI or Consumer Price Index. When the CPI rises, so do the accumulated interest and the primary amount. These bonds are considered a strong hedge against inflation.\u00a0<\/span><\/p>\n<h3><span class=\"ez-toc-section\" id=\"Zero-Coupon_Bonds\"><\/span><strong>Zero-Coupon Bonds<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p><span style=\"font-weight: 400;\">These PSU bonds offer no coupon or interest. The main attraction of these bonds is the discounted price. The investors get to buy the bonds at a price lower than the face value but receive the actual face value on maturity.\u00a0<\/span><\/p>\n<h3><span class=\"ez-toc-section\" id=\"Bonds_with_Call_and_Put_option\"><\/span><strong>Bonds with Call and Put option<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p><span style=\"font-weight: 400;\">Call here refers to buy back and put refers to sell. <a href=\"https:\/\/goldenpi.com\/collections\/highly-safe-bonds\" target=\"_blank\" rel=\"noopener noreferrer\">Bonds<\/a> with the call option permit the issuer to buy the bond back, and the put option allows investors to sell the bond before maturity.\u00a0<\/span><\/p>\n<h3><span class=\"ez-toc-section\" id=\"Tax-Free_Bonds\"><\/span><strong>Tax-Free Bonds<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p><span style=\"font-weight: 400;\">Taxation on investment is a crucial aspect to consider when planning finances. While the accrued interest and capital gains from bonds are taxable, certain bonds have no tax imposition on the interest accumulation. These are called <a href=\"https:\/\/goldenpi.com\/collections\/tax-free-bonds\">tax-free bonds<\/a> and are particularly beneficial for those belonging to the high-tax bracket.<\/span><\/p>\n<h2><span class=\"ez-toc-section\" id=\"Benefits_of_PSU_Bonds\"><\/span><strong>Benefits of PSU Bonds<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p><span style=\"font-weight: 400;\">Many entities from the PSU sectors have issued bonds over the years, and the demand for them is high. Here are the benefits driving the high purchase of bonds.<\/span><\/p>\n<h3><span class=\"ez-toc-section\" id=\"Low_Risk\"><\/span><strong>Low Risk<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p><span style=\"font-weight: 400;\">The PSU bonds are backed by the government. The chance of a government body defaulting payment is significantly low, making them greatly secured investment options.<\/span><\/p>\n<h3><span class=\"ez-toc-section\" id=\"Higher_Returns\"><\/span><strong>High(er) Returns<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p><span style=\"font-weight: 400;\">PSU bonds offer attractive interest rates. More importantly, the PSU bonds offer higher interest rates and overall returns than other popular and <a href=\"https:\/\/goldenpi.com\/blog\/fixed-income\/corporate-fixed-deposit\/are-corporate-fixed-deposits-a-safe-investment-choice\/\" target=\"_blank\" rel=\"noopener noreferrer\">safe investment options like FDs<\/a>.<\/span><\/p>\n<h3><span class=\"ez-toc-section\" id=\"Regular_Income\"><\/span><strong>Regular Income<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p><span style=\"font-weight: 400;\">These bonds are known to offer regular interest payments, either semi-annually or annually. This creates a source of regular income, which is useful for many, including senior citizens in their post-retirement phase.\u00a0<\/span><\/p>\n<h3><span class=\"ez-toc-section\" id=\"Long-Term_Investment_Value\"><\/span><strong>Long-Term Investment Value<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p><span style=\"font-weight: 400;\">PSU bonds are great options when searching for safe, long-term investments. Investors can stay invested for a long period without worrying about the hassles of frequent reinvestment and receive steady payments.\u00a0<\/span><\/p>\n<h2><span class=\"ez-toc-section\" id=\"Who_Should_Invest_in_PSU_Bonds\"><\/span><strong>Who Should Invest in PSU Bonds<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p><img decoding=\"async\" class=\"aligncenter wp-image-8168 size-full\" src=\"https:\/\/d2zny4996dl67j.cloudfront.net\/blogs\/wp-content\/uploads\/2024\/06\/27041816\/Who-Should-Invest-in-PSU-Bonds.jpg\" alt=\"Who Should Invest in PSU Bonds\" width=\"1160\" height=\"550\" srcset=\"https:\/\/d2zny4996dl67j.cloudfront.net\/blogs\/wp-content\/uploads\/2024\/06\/27041816\/Who-Should-Invest-in-PSU-Bonds.jpg 1160w, https:\/\/d2zny4996dl67j.cloudfront.net\/blogs\/wp-content\/uploads\/2024\/06\/27041816\/Who-Should-Invest-in-PSU-Bonds-300x142.jpg 300w, https:\/\/d2zny4996dl67j.cloudfront.net\/blogs\/wp-content\/uploads\/2024\/06\/27041816\/Who-Should-Invest-in-PSU-Bonds-1024x486.jpg 1024w, https:\/\/d2zny4996dl67j.cloudfront.net\/blogs\/wp-content\/uploads\/2024\/06\/27041816\/Who-Should-Invest-in-PSU-Bonds-768x364.jpg 768w, https:\/\/d2zny4996dl67j.cloudfront.net\/blogs\/wp-content\/uploads\/2024\/06\/27041816\/Who-Should-Invest-in-PSU-Bonds-585x277.jpg 585w\" sizes=\"(max-width: 1160px) 100vw, 1160px\" \/><\/p>\n<p><span style=\"font-weight: 400;\">PSU bonds are best suited for investors falling into these categories.<\/span><\/p>\n<h3><span class=\"ez-toc-section\" id=\"Risk-Averse_Investors\"><\/span><strong>Risk-Averse Investors<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p><span style=\"font-weight: 400;\">Senior citizens, investors with low to no experience, and many other investors often look for investment options with low risk. PSU bonds will be ideal for them.<\/span><\/p>\n<h3><span class=\"ez-toc-section\" id=\"Investors_Looking_for_Portfolio_Diversification\"><\/span><strong>Investors Looking for Portfolio Diversification<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p><span style=\"font-weight: 400;\">Whether the risk tolerance is high or low, PSU bonds can help diversify the investment portfolio. Investors with several high-risk investments in their portfolios can create balance with PSU bonds.<\/span><\/p>\n<h3><span class=\"ez-toc-section\" id=\"Investors_Seeking_Regular_Income\"><\/span><strong>Investors Seeking Regular Income<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p><span style=\"font-weight: 400;\">Senior citizens in their post-retirement years come first to mind, but they are not alone in requiring options like PSU bonds that can generate regular income.\u00a0<\/span><\/p>\n<h3><span class=\"ez-toc-section\" id=\"Investors_Requiring_Long-Term_Investment_Tools\"><\/span><strong>Investors Requiring Long-Term Investment Tools<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p><span style=\"font-weight: 400;\">With tenure stretching up to 15 years, anyone looking for a long-term investment tool should check out PSU bonds.\u00a0<\/span><\/p>\n<h2><span class=\"ez-toc-section\" id=\"List_of_Top_PSU_Bonds_to_Invest_in_2024\"><\/span><strong>List of Top PSU Bonds to Invest in 2024<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p><span style=\"font-weight: 400;\">Checking out the features and types is certainly necessary for selecting the best-suited option. Meanwhile, you should also keep a strong eye on the top PSU bonds to invest in India in 2024.<\/span><\/p>\n<div id=\"footable_parent_8143\"\n         class=\" footable_parent ninja_table_wrapper loading_ninja_table wp_table_data_press_parent semantic_ui \">\n                <div class=\"pcrstb-wrap\"><table data-ninja_table_instance=\"ninja_table_instance_1\" data-footable_id=\"8143\" data-filter-delay=\"1000\" aria-label=\"PSU Bonds_ Definition, Type and Benefits - Sheet1.csv\"            id=\"footable_8143\"\n           data-unique_identifier=\"ninja_table_unique_id_1118609030_8143\"\n           class=\" foo-table ninja_footable foo_table_8143 ninja_table_unique_id_1118609030_8143 ui table  nt_type_legacy_table fixed selectable celled striped vertical_centered  footable-paging-right ninja_table_pro\">\n                <colgroup>\n                            <col class=\"ninja_column_0 \">\n                            <col class=\"ninja_column_1 \">\n                            <col class=\"ninja_column_2 \">\n                            <col class=\"ninja_column_3 \">\n                            <col class=\"ninja_column_4 \">\n                    <\/colgroup>\n        <thead>\n<tr class=\"footable-header\">\n                                                                                        <th scope=\"col\"  class=\"ninja_column_0 ninja_clmn_nm_bondissuer \">Bond Issuer<\/th><th scope=\"col\"  class=\"ninja_column_1 ninja_clmn_nm_interestrate \">Interest Rate<\/th><th scope=\"col\"  class=\"ninja_column_2 ninja_clmn_nm_payments \">Payments<\/th><th scope=\"col\"  class=\"ninja_column_3 ninja_clmn_nm_maturitydate \">Maturity Date<\/th><th scope=\"col\"  class=\"ninja_column_4 ninja_clmn_nm_creditratingbyicra \">Credit Rating (by ICRA)<\/th><\/tr>\n<\/thead>\n<tbody>\n\n        <tr data-row_id=\"370\" class=\"ninja_table_row_0 nt_row_id_370\">\n            <td>National Bank For Agriculture And Rural Development - Taxable<\/td><td>7.46%<\/td><td>Yearly<\/td><td>30-Sep-2027<\/td><td>AAA<\/td>        <\/tr>\n            <tr data-row_id=\"371\" class=\"ninja_table_row_1 nt_row_id_371\">\n            <td>Indian Railway Finance Corporation Limited<\/td><td>7.33%<\/td><td>Yearly<\/td><td>9-Sep-2029<\/td><td>AAA<\/td>        <\/tr>\n    <\/tbody><!--ninja_tobody_rendering_done-->\n    <\/table><\/div>\n    \n    \n    \n<\/div>\n\n<h2><span class=\"ez-toc-section\" id=\"Invest_in_PSU_Bonds_with_GoldenPi\"><\/span><strong>Invest in PSU Bonds with GoldenPi<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p><span style=\"font-weight: 400;\"><a href=\"https:\/\/goldenpi.com\/collections\/psu-bonds\" target=\"_blank\" rel=\"noopener noreferrer\">Investment in PSU bonds<\/a> can fetch many appealing benefits, including high interest and safety. With GoldenPi, the entire process of investing in PSU bonds becomes more convenient and less time-consuming. The first step of any investment plan is research on the available options. GoldePi has all the information you may need on the latest PSU bond issuances. Everything is mentioned transparently, and you can quickly evaluate the options on the same platform.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Investment through<a href=\"https:\/\/goldenpi.com\/\" target=\"_blank\" rel=\"noopener noreferrer\"> GoldenPi<\/a> is a simple, 3-step process. Sign up for free. You will have to complete your KYC; digital documentation will make your experience seamless. Now, it is just a matter of making the payment for your selected bond.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Keep in touch with the latest developments in the Indian bond market, receive important notifications, and harvest the benefits of the best investment instrument.\u00a0<\/span><\/p>\n<h2><span class=\"ez-toc-section\" id=\"FAQs_About_PSU_Bonds_Definition_Type_and_Benefits\"><\/span><strong>FAQs About PSU Bonds: Definition, Type and Benefits<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n<h3><span class=\"ez-toc-section\" id=\"1_Is_PSU_a_government_company\"><\/span><strong>1. Is PSU a government company?<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p><span style=\"font-weight: 400;\">A <\/span><b>PSU meaning<\/b><span style=\"font-weight: 400;\"> Public Sector Undertaking, is an entity where the government has at least 51% stake or more. Examples can be a power corporation, food corporation, housing corporation, railway, oil corporation, or bank.<\/span><\/p>\n<h3><span class=\"ez-toc-section\" id=\"2_What_are_the_main_types_of_bonds\"><\/span><strong>2. What are the main types of bonds?<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p><span style=\"font-weight: 400;\">Based on the issuing entity, bonds can be of the following types:<\/span><\/p>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Treasury Bonds (offered by the Government of India)<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">State Government Loans (offered by any state government in India)<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\"><a href=\"https:\/\/goldenpi.com\/collections\/state-government-guranteed-bonds\">State Guaranteed Bonds<\/a> (offered by any state government in India)<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Municipal Bonds (offered by a Municipal Corporation)<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">PSU bonds (offered by Public Sector Undertakings)<\/span><\/li>\n<\/ul>\n<p><span style=\"font-weight: 400;\">Based on their nature and features, bonds can be of the following types:<\/span><\/p>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Fixed Rate Bonds<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Floating Rate Bonds<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Zero-Coupon Bonds<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Tax-Free Bonds<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Inflation-Indexed Bonds<\/span><\/li>\n<\/ul>\n<h3><span class=\"ez-toc-section\" id=\"3_What_are_PSU_bonds_in_India\"><\/span><strong>3. What are PSU bonds in India?<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p><span style=\"font-weight: 400;\">PSU bonds in India are bonds offered by PSU entities. They function the same way as most <a href=\"https:\/\/goldenpi.com\/collections\/state-government-guranteed-bonds\" target=\"_blank\" rel=\"noopener noreferrer\">government bonds in India<\/a> and are backed by sovereign security. The low default risk and higher interest rates than many investment tools make them popular options among investors.\u00a0<\/span><\/p>\n<h3><span class=\"ez-toc-section\" id=\"4_Why_are_PSU_bonds_investor-friendly\"><\/span><strong>4. Why are PSU bonds investor-friendly?<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p><span style=\"font-weight: 400;\">PSU bonds are investor-friendly for many reasons. The default risk factor associated with these bonds is considerably low. The offered rates of interest are greater than many other investment options available in the market. Moreover, there are many types of PSU bonds investors can pick based on their investment goals.\u00a0<\/span><\/p>\n<h3><span class=\"ez-toc-section\" id=\"5_What_are_the_features_of_public_sector_bonds\"><\/span><strong>5. What are the features of public sector bonds?<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p><span style=\"font-weight: 400;\">The key features of PSU bonds are:<\/span><\/p>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Long tenure, ranging up to 15 years<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">High returns<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Low risk of default<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Periodic payment of interest<\/span><\/li>\n<\/ul>\n<h3><span class=\"ez-toc-section\" id=\"6_How_to_invest_in_the_public_sector_undertaking_bonds\"><\/span><strong>6. How to invest in the public sector undertaking bonds?<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p><span style=\"font-weight: 400;\">Investing in public sector bonds can be fast and simple when you have an effective platform like GoldenPi. You will find the latest PSU bonds here, along with the required details and their credit ratings for making an informed investment decision. Complete your KYC and proceed with the bond purchase without any difficulties.\u00a0<\/span><\/p>\n<h3><span class=\"ez-toc-section\" id=\"7_Are_public_sector_undertaking_bonds_safe\"><\/span><strong>7. Are public sector undertaking bonds safe?<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p><span style=\"font-weight: 400;\">Public Sector Undertakings 51% or more of the government&#8217;s stake. Since the bonds are backed by the government, the risk of defaulting is low.<\/span><\/p>\n<p><script type=\"application\/ld+json\">{\"@context\":\"https:\/\/schema.org\",\"@type\":\"FAQPage\",\"mainEntity\":[{\"@type\":\"Question\",\"name\":\"1. Is PSU a government company?\",\"acceptedAnswer\":{\"@type\":\"Answer\",\"text\":\"A PSU meaning Public Sector Undertaking, is an entity where the government has at least 51% stake or more. Examples can be a power corporation, food corporation, housing corporation, railway, oil corporation, or bank.\"}},{\"@type\":\"Question\",\"name\":\"2. 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Sovereign backing reduces the risk level&hellip;<\/p>\n","protected":false},"author":8,"featured_media":8454,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_lmt_disableupdate":"","_lmt_disable":"","footnotes":""},"categories":[253],"tags":[254],"class_list":["post-8142","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-psu-bonds","tag-psu-bonds"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v26.6 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>PSU Meaning Explained: What is a Public Sector Undertaking?<\/title>\n<meta name=\"description\" content=\"Discover the meaning of PSU and its significance in India. GoldenPi explains Public Sector Undertakings, their roles, and impact on the economy. 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