🔍 Bonds vs.Stocks:Key Differences |
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| Feature | Bonds | Stocks |
| Ownership vs. Loan | You’re a creditor, not an owner. | You own a share of the company. |
| Returns | Predictable interest (~4–6% historically) hdfcsky.com. | Potentially high returns (~8–10% long‑term). |
| Risk Level | Lower volatility; safer, but sensitive to rates and inflation. | Higher volatility is influenced by company and market factors. |
| Income Certainty | Fixed and reliable if held to maturity. | Dividends are possible but not guaranteed; capital gains vary. |
| Term | Maturity date fixed. | No maturity—hold as long as desired. |
| Taxation | Interest taxed as income; some (e.g., munis) have tax perks. | Capital gains/dividends are taxed depending on the holding period. |
| Liquidity | May be less liquid; selling before maturity can be costly. | Generally, more liquid trade occurs on exchanges at any time. |