When a company is need for huge amount of fund, it issues debentures to acquire funds. Debentures are a kind of bond issued by a company to acquire loan from the public. They provide basic interest rates in return and redemption of principal amount at the end of the predetermined time period. Redemption of debentures can be called as the cancellation of the debentures, whereby the debentures do not hold any kind of liability on the company.

A debenture can be classified into many types. Some of them are mentioned below:

• Secured debenture: A debenture that holds charges on the company’s asset is called secured debenture.
• Unsecured debenture: A debenture that does not hold any charge on the company’s asset is called unsecured debenture.
• Redeemable debenture: The debenture that can be redeemed after a fixed time period is called redeemable debenture.
• Irredeemable debenture: The debenture that cannot be redeemed is called an irredeemable debenture.
• Convertible debenture: The debenture that can be converted into equity at the time of maturity is called a convertible debenture.
• Non-Convertible Debenture: The debenture that cannot be converted into equity at the time of maturity is called a non-convertible debenture.

NCDs provide protection against risk, liquidity and tax. The interest is paid on timely basis along with the capital weekly/monthly/quarterly. The investors can gain constant returns on NCDs with low risk and high liquidity. NCDs are very safe and ensure risk-return management in an investment.

Following that, as stated by the corporation, NCDs are listed on the stock exchange. After it is listed on the stock exchange, one can invest in NCDs through registered brokers or any other means that allows access to the stock exchange.

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