Are NCDs safe investments?
Although NCDs are considered safe investments for retail investors, they should always look into the credibility of the issuing company before investing.
Secured non-convertible debentures are backed by the company's assets, which makes that low risk. If the corporation fails to honour the obligations of the NCD, the debenture holder can have a claim on the company's assets to recover his investment. But unsecured NCDs don't come with such protection, and in case of bankruptcy, the debenture holder can't raise a claim against the company.
Retail investors need to understand the risks before investing.