Bond Laddering Explained: How To Manage Interest Rate Risk & Keep Your Money Flexible

Bond duration plays an important role in understanding risk, flexibility and returns. Longer-term bonds can offer higher yields, but their prices can move more when interest rates change. Vishal Goenka, Co-founder, Indiabonds, explains why first-time investors may consider shorter-duration bonds and how a bond laddering strategy can provide greater flexibility. By spreading investments across bonds maturing in one, two and three years, investors can receive money periodically and reinvest based on prevailing rates. The discussion also explains how laddering can help manage interest-rate risk without trying to time the market.