Bonds in India

Bonds in India can be a great option for earning stable returns. Start investing with just Rs. 1,000 and earn monthly/ quarterly interest at Paisabazaar.

High returns

Earn fixed returns of up to 13.25%

Low investment

Start investing with as little as ₹1,000

Low risk

Invest in AAA–BBB rated bonds

No brokerage

0% brokerage or commission fees

Explore Bonds by Category

High Yield

ICRA BBB

You Invest

₹9,918

Returns (YTM)

13.25%

You Get

₹11,696

Today

17 months

Invest in Tencent Backed, Digitally-Driven NBFC Managing an AUM of 1,700+ Cr

You Invest

₹9,918

Returns (YTM)

13.25%

You Get

₹11,696

Today

17 months

Invest in Tencent Backed, Digitally-Driven NBFC Managing an AUM of 1,700+ Cr

ICRA BBB

INFOMERICS A-

You Invest

₹1,02,680

Returns (YTM)

13%

You Get

₹1,32,202

Today

37 months

Backed by Embassy, a real estate group with INR 12,000+ Cr market cap

You Invest

₹1,02,680

Returns (YTM)

13%

You Get

₹1,32,202

Today

37 months

Backed by Embassy, a real estate group with INR 12,000+ Cr market cap

INFOMERICS A-

CARE BBB+

You Invest

₹99,390

Returns (YTM)

13%

You Get

₹1,17,652

Today

30 months

Listed NBFC backed by Kedaara Capital with 47% Capital Adequacy Ratio

You Invest

₹99,390

Returns (YTM)

13%

You Get

₹1,17,652

Today

30 months

Listed NBFC backed by Kedaara Capital with 47% Capital Adequacy Ratio

CARE BBB+

What are Bonds?

Bonds are fixed income instruments, which the governments and entities issue to raise money for financing their projects, expenditures and other activities. In this, the investor purchasing bonds in India basically lends money to the bond-issuing entity. In return, the entity pays interest at periodical intervals (typically monthly/quarterly). When the bond reaches its maturity date, the bondholder gets back the principal value (face value) of the bond. Thus, bondholders can be considered as creditors for the bond issuers.

How to Buy Bonds through Paisabazaar?

Get up to 13.25% from bonds in 5 simple steps

Step 1: Login to your Paisabazaar account

Step 2: Select the Bonds

Step 3: Complete the KYC process

Step 4: Enter bank details

Step 5: Link your demat account

Types of Bonds

Corporate Bonds

Listed public sector and private sector companies issue corporate bonds for financing their operations, expansion, debt consolidations, etc.

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Central Government Bonds

Central government issues these bonds for tenures of 5 to 40 years with their interest payments at half yearly intervals.

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Zero Coupon Bonds

These bonds do not offer any coupon (interest) payments to investors.

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Capital Gains Bonds

These bonds help individuals and Hindu Undivided Families (HUFs) save on Long-Term Capital Gains (LTCG) tax liability arising from the sale or transfer of their land or building.

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Floating Rate Bonds

The interest or coupon payments of these bonds are linked to predetermined benchmark rates, which if changes could also change the bond’s coupon rate.

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State Development Loans (SDL)

State governments in India issue State Development Loans (SDLs). They are almost as secure as Central Government Bonds.

Municipal Bonds

Urban local bodies issue municipal bonds to raise money for financing various development projects.

Convertible Bonds

These bonds can be converted into shares after a specified period, either at the current market price or at a price pre-determined at the time of the bond issue.

Callable Bonds

In these bonds, issuers have the right to buy back these bonds before their maturity dates.

Why Invest in Bonds through Paisabazaar?

High Returns

Earn fixed returns of up to 13.25%.

Low Risk

Invest in a range of highly rated (AAA-BBB) corporate bonds.

Flexible Payout

Get fixed returns credited in your demat linked bank account every month/ quarter.

Low Investment

Start investing with as little as Rs. 1,000.

Safety & Security

Invest in SEBI-regulated senior secured bonds to enjoy higher claim priority over shareholders in case of default or liquidation.

Sell Anytime

Sell bonds anytime through Paisabazaar.

Transparency

Real-time price discovery and assured transaction.

No brokerage/commission

Invest without paying brokerage or commission fee.

End-to-end digital process

Enjoy seamless end-to-end digital process.

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How are Bonds Rated?

SEBI-recognised credit rating agencies such as CRISIL, ICRA and CARE rate bonds based on the issuer's financial health. These ratings indicate how safe it is for you to lend money to a company by buying its bonds, which helps investors make informed decisions when investing in bonds.

Bonds Video Tutorials

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6 Benefits of Investing in Bonds in India

Bonds offer several key benefits, including steady income generation, capital preservation, and portfolio diversification, making them a cornerstone of a balanced investment strategy.

Steady Income Stream:

Bonds usually offer fixed interest at regular intervals, providing investors a steady income stream.

Capital Preservation:

The principal of bonds is repaid at maturity, making them ideal for those seeking capital protection amid market volatility.

Diversification:

Investing in bonds can offset the risks associated with more volatile assets like stocks.

Lower Volatility:

Bonds usually show lower price volatility than stocks, offering stability to risk-averse investors.

Predictable Returns:

Bonds offer fixed interest and guarantee to return the principal at maturity, helping investors estimate their future returns and plan their finances in advance.

Potential for Capital Gains:

Investors usually hold bonds for income, however, they can also provide profits if they are sold at higher prices before maturity.

Things to Consider before Investing in Bonds

Here are a few points that investors should consider before investing in bonds in India:

Check the bond issuer’s credit rating:

This is a preliminary but important check as it will help you filter out riskier bond options from your list. Usually, AAA rated bonds are the safest bet with a very low chance of default.
Look into the bond issuer’s financial health:

Don’t solely rely on credit ratings, make sure to look at the bond issuing entity’s financials too such as balance sheet, P&L account, leverage ratios, etc. to evaluate corporate bonds.
Check if the bond is secured or unsecured:

This is applicable to corporate bonds. A secured corporate bond is backed by assets of the bond issuing entity and therefore, are safer than unsecured bonds. In case the bond issuer closes down or defaults on its repayment obligations, the pledged assets can be sold off to repay the bondholders. Among the secured bondholders, senior secured bondholders will be the first to receive repayments (right after payment of statutory and tax dues).
Check the frequency of coupon payment:

Bonds offer coupon payments at regular intervals, i.e., monthly, quarterly, half-yearly and annually. Before you start investing in a bond, check the frequency of its coupon payments and ensure that it matches with your cash flow requirements.
Compare YTM:

Yield to Maturity of a bond is the annualised rate of return if the investors holds the bond till its maturity date. Thus, always compare the YTM of a bond and remember to check its credit rating also. As lower credit rating bonds have higher YTM and vice versa, make sure that you make your pick as per your risk appetite.

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Paisabazaar Bonds in News

How to Buy Bonds through Paisabazaar?

Get up to 13.25% from bonds in 5 simple steps

Step 1: Login to your Paisabazaar account

Step 2: Select the Bonds

Step 3: Complete the KYC process

Step 4: Enter bank details

Step 5: Link your demat account

FAQs

Senior secured bonds are a type of secured bonds that are senior in capital structure. In addition to being backed by collateral, these bonds receive higher priority in receiving repayments over sub-ordinated or junior secured bondholders, if and when the issuer defaults.

The following SEBI-recognised credit rating agencies rate bonds based on its issuer’s financial health:Acer Credit Rating Pvt. Ltd.Acuite Ratings & Research Ltd.Brickwork Ratings India Pvt. Ltd.CARE Ratings Ltd.CRISIL Ratings Ltd.ICRA Ltd.India Ratings and Research Pvt. Ltd. (formerly Fitch Ratings India Pvt. Ltd.)Infomerics Valuation and Rating Pvt. Ltd.

Corporate bonds are debt instruments issued by public sector and private sector companies to raise money for financing their operations, expansion, debt consolidations, etc. When you invest in a corporate bond, you basically lend money to the bond issuing company, which in return pays fixed periodic interest payments with a promise to repay the principal amount on its maturity date.

Government bonds are issued by the central government to raise funds for financing their spending and other obligations. These bonds are usually issued for tenures ranging from 5 to 40 years and make interest payments on a half-yearly basis. Being backed by sovereign guarantee, government bonds are considered among the safest investment options in India.

When a bond issuer defaults on its repayments, the chances of recovering the obligated sum would depend on whether the bond is secured and its status in the capital structure. Senior secured bondholders receive the highest priority in receiving repayments, giving them the highest level of protection. Sub-ordinated or junior secured bondholders receive the second highest priority followed by unsecured bondholders.