What Is The Basic Difference Between Bond And Debenture?
A Bond is a fixed note with interest payments guaranteed and a maturation date and is guaranteed. A debenture is similar but is unsecured and is not guaranteed with any specific assets of the company. It has a characterization of more along the lines of stock where as a bond is more a direct finance, loan, instrument.
The bonds and debentures both are the financial institutions. According to companies act 1956 India debenture includes stocks, bond and any other • Securities of company whether constituting a charge on asset or not. • Generally private sector companies issue debentures and public sector and financial Institutions issue bonds. • Bond is a long term debt instrument that promises to pay a fixed annual interest over a Specific period. • Debentures may be convertible into equity shares while bonds are not. • Debentures may be redeemed in installment. Al institutions.
