A Debenture is a type of bond that is unsecured by collateral. It includes a promise to repay the debt as long as it meets the terms set forth in the document. Debentures are often issued by corporations or public agencies to raise money that can be used for expansion or for other projects. In most cases, debentures must be repaid within a specified time period, usually under 10 years.If they are not paid on time, the debenture is considered defaulted and the company or public agency will lose the investor's money. The primary benefit of a debenture is that it provides investors with a way to earn interest on their money. The downside is that it is considered riskier than other types of bonds.Debentures are attractive investments for people who want to earn interest on their money with a lower risk than bonds. Also, debentures are offered at different rates of return, so investors can choose a rate that meets their financial goals.
