Corporate firms prefer to borrow for accessing funds. Bonds and Non-Convertible Debentures (NCDs) are 2 different routes of borrowing to raise funds. Government and large corporations prefer bonds, while large public companies make the use of debentures for raising money from the market. These fixed income instruments produce lesser returns in comparison to stocks, but they give a touch of stability to your portfolio.
Non-convertible Debenture (NCD) means a financial instrument, in the form of a public issue. For several purposes, companies prefer to use them to raise capital. NCDs are known as debt instruments. These instruments carry fixed tenure and individuals investing in NCDs receive regular interest at a certain rate. Pay-outs can be decided by the investor and these can be monthly, quarterly, or annually. At the time of maturity, principal amount is paid to the investor (debenture holder). There are debentures which can be converted into shares after a certain duration. However, this is not possible if the instruments are NCDs. This is the reason they are non-convertible.
Bonds are fixed-income securities. Investor lends money to some company or a government for a specified time duration. In return, that investor will get interest payments regularly. Upon the completion of the tenure or when the bond reaches maturity, the bond issuer (borrower) returns the money to the investor.