Bonds offer a predictable stream of payments by way of interest and repayment of principal at the maturity of the instrument.
Debt securities enable wide-based and efifcient portfolio diversification and thus assist in portfolio risk-mitigation.
The investors benefit by investing in fixed income securities as they preserve and increase their invested capital and also ensure the receipt of regular interest income.
Most bonds carry a fixed charge on the assets of the entity and generally enjoy a reasonable degree of safety by way of the security of the fixed and/or movable assets of the company.
The investors can even neutralize the default risk on their investments by investing in Govt. securities, which are normally referred to as risk-free investments due to the sovereign
guarantee on these instruments.