New Delhi, Aug. 26 -- With rising interest in fixed-income assets due to the ongoing underperformance of the benchmark Nifty50 index and the broader equity market, many first-time investors are exploring bonds as a way to diversify portfolios and secure predictable cash flows.

Bonds issued by governments and corporations pay periodic interest and return principal at maturity. Still, before selecting any particular bond for investment, beginners need to understand and acknowledge risks, documentation, and yields.

You should always check the credit rating from ICRA, CRISIL, CARE, or India Ratings. Furthermore, higher yields generally mean higher risk. Government securities carry almost negligible credit risk. Corporate bonds, especially t...