Safety of bonds!

Bonds carry relatively lower risk than stocks, equity mutual funds, gold or real estate. The primary risk of a bond investment is credit risk which measures ability of the borrower to repay the investors. For example, government bonds like G-Secs and T-bills which come with the sovereign guarantee of the government carry very low risk for the investors. Corporate bonds can vary in risk depending on the financial strength of the issuing company from very low to very high. For example, a company which has a strong credit rating like AAA carry very low risk compared to another company which has a rating of BB or worse. These risk ratings are provided by third-party risk rating agencies like CRISIL, Care or ICRA.