Bonds good option to park money; investors can benefit from RBI rate cuts

The short-to-medium tenure bonds, which are less volatile and could deliver better returns than cash or other liquid mutual funds are other options, say experts

Indian equity markets are likely to remain highly volatile in the near term. However, at a time when the overall investment sentiment is subdued, the bond market is likely to be in a relatively better shape.

With concerns of muted economic activities globally as well as in India amidst spread of coronavirus, the Reserve Bank of India (RBI) is expected to cut interest rates, which augur well for long tenure bonds. Interest rates and bond prices are inversely related—meaning if rates fall, bond prices move up and vice-a-versa.

According to Dhawal Dalal, chief investment officer (CIO) at Edelweiss Securities, “Given