Global Parent’s Day: Indian Bonds – A Lifeline for the Sandwiched Generation

On Global Parent’s Day, we celebrate the incredible journey of parenthood. But how about celebrating the unsung heroes- the parents who also look after their own parents? From becoming the family's breadwinners to feeling like the sandwiched generation, today's not-so-young parents find themselves in a challenging predicament. Their responsibilities towards their little ones and their aging retired parents leave them with very little room for themselves. The emotional and financial strain can be overwhelming, as they strive to meet the needs of two generations. To say the least, this is the generation is left in lurch, between juggling their jobs, parenting, care-giving and their own lives.

In this Family Volvo journey, self-care often takes a backseat, leading to neglected physical and financial health. While they invest in various financial products to secure their children's futures and support their elders' medical and retirement needs, the search for a comprehensive solution continues. This is where Indian bonds can play a crucial role, offering a blend of security, returns, and peace of mind.

How Indian Bonds Can Support the Sandwiched Generation

1. Coupon interest payments: The regular interest payments, are an excellent source of creating a passive income cashflow for medical needs, academic fees, recreational endeavors and even pocket money! The certainty and predictability of the cash inflows can help one develop a sound financial plan for their family.

2. Security: The Indian Debt Market is very secured. Government bonds like G-secs, State Development Loans (SDLs) and Municipal Bonds come with Sovereign Guarantee, which means government backs your investment and will ensure timely payouts. All corporate bonds have credit ratings via agencies like CRISIL, ICRA, CARE, etc. which analyse and grade the creditworthiness of these companies. A lot of public sector companies (PSUs) and private companies have bonds with AAA rating, which represents the least probability of default. An investor can make a secured and informed choice, keeping his capital intact.

3. Liquidity: Bonds can be traded (buy/sell) on secondary market via various OBPP platforms like BondsIndia. The development of secondary market helps the investors sell their bonds in case of emergencies when they can not wait till maturity date.

4. Longer tenures: RBI is now also issuing Indian Government Bonds (G-secs) with 40- and 50-years tenure! (Earlier, the tenures ranged from 1-30 years) The security of receiving a fixed interest payment over 40-50 years, can heave huge relief to cashflow budgeting for the parents. Allocation of money in these long tenure bonds can help one plan their retirement, children’s education expenses and medical expenses.

5. Inflation protection: Bonds are often compared to bank FDs due to their similar structures. However, bonds offer returns in the range of 6.5-14%, while bank FDs typically provide returns of only 5-7%. With India's average inflation rate at 5-6%, investing in bank FDs can erode investor wealth since they don't outpace inflation. Bonds, on the other hand, are a superior alternative to traditional bank FDs, as they help in wealth creation by beating inflation.

6. Online, easy and Quick: BondIndia’s OBPP platform guarantees a 15-minute procedure for purchasing bonds. In most metros and towns, this is time required to reach a bank! Today’s parents are busy, their work schedules and domestic roles leave them very little time. The fact that one can invest in bonds online, without any physical document signing or delivery makes it an ideal fit for our busy parents. OBPP platforms today are secured and also governed by SEBI. They are transparent and trustworthy.

Global Parent’s Day is a time to honor the dedication and sacrifices of parents, especially those of the sandwiched generation. They are the silent warriors who tirelessly care for both their children and parents, often at the expense of their own needs. As we celebrate our parents and acknowledge our roles as parents, let’s also recognize the importance of financial security in this journey. Indian bonds offer a way to ensure that we can meet our families' needs with confidence and peace of mind.