A demat account (dematerialised account) helps investors hold shares and securities in an electronic format. You can keep proper track of all the investments made in shares/stock, ETF/exchange-traded funds, Bonds, and even Mutual Funds in one place. Now a days demat i mandatory to deal with stocks, bonds and other financial instrumets. Even if you have shares in physical format then you need to deamt the same to sell them. There are charges involved if you have open demat account, mainly AMC (Annual Maintenace Charges) charges, transaction charges, STT and other charges invovled while you deal with financial products via demat account. The Major usages of Demat account are Lower Cost, Less Paperwork, No-Risk, Instant Transactions. The Advantages are :

• Easy to use and secured
• Automatic Credit and debit of stocks
• Low transaction fees
• Apply for Ipo just a clicked away
• One time KYC process

Banks offer Fixed deposits which are more secure in nature. The Corporate Fixed Deposits are offired by Non-Banking Financial Company (NBFC). These are the companies which work similar like banks without banking license. The security of these fixed deposits are decided by credit rating agencies like Crisal, care etc. These rating indicate the level of security of the deposit (bonds or paper offered by NBFC). You must take decision of security over the more income from deposits. The interest rate on NBFC Fixed deposits are higher then banks. The interest is paid either compounding or simple with payment option like Monthly, Quarterly, Half yearly, Yearly. Always prefer high security rating companies to invest.

Governments and corporation sell bonds to raise money from market. A bond is loan from an investor to a borrower such as a company or government. Seller use the money for operations and invester gets interest on the investment. There are five main types of bonds: Treasury, savings, agency, municipal, and corporate. There is risk involved with the bonds also. The Bonds issued by Goverment or muncipal bodies are considered as more secure and reliable then those issued by corporate. The bonds offer higher interest then banks or NBFC. The bonds are mostly have fixed lock in period.

Non convertible debentures (NCD) are those which cannot be converted into shares or equities. NCD interest rates depend on the company issuing the NCD. NCD investment can be held by individuals, banking companies, primary dealers other corporate bodies registered or incorporated in India and unincorporated bodies. Non-convertible debentures have a fixed tenure and interest is paid either quarterly, semi-annually, or annually and the principal is repaid at maturity to the investors. The major difference between bonds and NCD is that bonds can be converted into shares or issuing company wherein the NCD are not.

PMS or Portfolio Management Service is a professional service where qualified and experienced portfolio managers backed by a research team manage equity portfolios on behalf of clients who invest in PMS. Portfolio Management Services is an investment portfolio in stocks, fixed income, debt, cash, structured products and other individual securities, managed by a these professional money manager. If your risk appetite is higher and you can afford the high risk over a period of time then PMS and AIF are best investment. High Risk High Return rule applies here.

Alternative Investment Funds (AIF for short) are those funds created or established in India as a privately pooled investment vehicle in order to collect funds from specific investors as per a previously defined investment policy.AIFs aim to increase the wealth of the financially sound (HNIs or high net-worth individuals), mutual funds let everyday investors try their hand at investing. AIF is similar to mutual funds for high risk or high networth investors.