"Public Sector Undertaking (PSU) bonds are issued by government-owned corporations to raise funds for infrastructure and development projects. These bonds are highly preferred by conservative investors due to their low credit risk and stable returns. Some of the most well-known PSU bonds are issued by NHAI, REC, PFC, IRFC, and HUDCO, making them a trusted investment option.

PSU bonds come in two main types: taxable and tax-free bonds. Taxable PSU bonds offer higher interest rates (usually between 6% and 8%), while tax-free PSU bonds provide tax-exempt interest income, making them attractive for high-income earners. Most PSU bonds have AAA or AA+ ratings, ensuring their safety.

The tenure of PSU bonds varies from 5 to 20 years, making them a long-term investment suitable for investors seeking regular interest payouts and capital preservation. They are traded on stock exchanges, allowing investors to exit before maturity if needed.

This blog will explain everything you need to know about PSU bonds, their benefits, risk factors, and how to invest in them for a balanced fixed-income portfolio."