Bonds are backed by government guarantee whereas the same is not necessary in case of NCDs. But generally speaking, NCDs are also secured to a larger extent if not 100%. However, bonds carry a lower rate of interest as compared to NCBs.
- In case of highly rated company, NCD can be issued by both the Government company or any other public listed company while bonds are backed by the Government's guarantee.
- NCDs have comparatively higher rate of interest (return, coupon rate) than Bonds.
- NCDs cannot be converted into shares whereas convertible bonds are convertible into shares.
