Want to be a responsible person in society and still make some profit out of it? 

Sounds like a good deal, right? You invest your money, be a responsible and good citizen, supporting something useful – life, clean cities, or better infrastructure, and the best you can earn from it. Sounds like a good deal? However, many people are unaware that such options exist. One of the types of municipal bonds that has existed in India for a very long time (around the 1990s) is issued by the city governments to raise money for the development of their locality. Yes, every problem u face, like water, transport, waste management, and many more basic problems like these. 

CURRENT SCALE AND CREDIT QUALITY 

Right now, not many cities in India are using municipal bonds. Despite being a part of the Indian market for the past 4-5 decades, so far only 50 municipal bonds have been issued by the ULBs (urban local bodies) that raised almost 7,000 crores. This number may seem big to you, but when we see the need for infrastructure development and its financing in urban India, this amount is nowhere near sufficient. Even after visible growth in large and major cities of India, the municipal bonds ecosystem still faces limitations. 

Benefits of investing in municipal bonds. 

Now the basics are done, we have come to the part of why you, as an individual, should know about this, and what the point of reading this article is. Let’s talk about its benefits. 

If you are a calculative type of person who focuses on safety, security, and steady returns with lower risk attracts you, A person who is not willing to risk their hard-earned money on some possibility or probability of getting a return. For a person who values every single rupee and still wants to help society, municipal bonds are worth a look. Little is clear that these bonds usually offer interest rates higher than fixed deposits, sometimes by 1-2% which means better earnings over time for sure. Some of them come with tax benefits if you are losing a lot on your monthly taxes, but this depends on the structure and government policies at the time of the issue. 

The most beautiful part of it from my perspective is that your money is going into real development things you can see, like better roads, clean water, and better public spaces. So please don’t look at it just like an investment, but a contribution to your own city’s development.  

Since many of these bonds are rated AA or A+, they are seen as fairly secure by the experts.