Bonds & Debentures
Steady Fixed Income with Lower Market Risk
Diversify your portfolio with high-yield fixed income assets. Invest in government-backed securities, PSU tax-free issues, and AAA-rated corporate bonds offering returns up to 10.50% p.a.
- Yields up to 10.50% p.a.
- AAA / AA+ high safety ratings
- Regular interest payout routes
- Capital gain opportunities
Invest in Bonds Online
Earn yields outperforming bank deposits.
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Corporate Bonds vs Bank Fixed Deposits
Understand why fixed-income corporate bonds are a compelling alternative to traditional bank FDs for higher yield seekers.
| Feature Parameter | AAA/AA+ Corporate Bonds | Bank Fixed Deposits (FDs) |
|---|---|---|
| Expected Returns (p.a.) | 8.50% - 10.50% | 6.50% - 7.90% |
| Regular Income Pay | Fixed coupon payouts (Monthly, Quarterly, Annually) | Cumulative at maturity or regular pay choice |
| Capital Appreciation | Possible if interest rates in the market go down | Not possible (Principal value remains fixed) |
| Liquidity / Trading | Tradable on stock exchanges; quick demat exit | Premature breaking allowed with penury charges |
| Taxation | Interest taxed per slab; Capital Gains rules apply | Interest taxed per slab; TDS applicable |
Popular Bonds Available For Investment
Pick the right asset class matched with your tax-planning targets and risk-management profiles.
🏢 Corporate Bonds / NCDs
Non-Convertible Debentures issued by top-rated companies. They offer high coupon interest rates under strict SEBI compliance guidelines.
🪙 Sovereign Gold Bonds (SGB)
Issued by RBI on behalf of the Govt of India. Earn 2.50% p.a. fixed interest on face value, plus tax-free capital appreciation matched to physical gold price growth.
🛡️ Tax-Free PSU Bonds
Issued by government undertakings (like REC, NHAI, PFC). Interest yields are 100% exempt from income tax, making them highly favorable for high income brackets.
⚖️ Capital Gains Bonds (54EC)
Save tax on capital gains arising from property sale. Re-invest gains within 6 months to claim deductions up to ₹50 Lakhs.
Credit Quality & Demat Operations
Ensure smart fixed income decisions by evaluating credit safety parameters.
Credit Ratings Explained
- AAA & AA+ Ratings: Highest degree of safety regarding timely servicing of debt obligations.
- CRISIL / ICRA: Reputed rating agencies monitor cash flow metrics and company defaults quarterly.
- Risk Warning: Avoid high yields on speculative BB/B-rated papers.
Operation Prerequisites
- Demat Account: Mandatory to buy, store, and trade bonds on NSE/BSE exchanges.
- Auto Interest Payouts: Coupon yields are credited directly to your registered bank account.
- Tax Deduction: No TDS is applicable on listed dematerialized bonds.
Frequently Asked Questions
The debt-to-income (DTI) ratio is the percentage of your monthly income that goes toward paying off existing debts (EMIs). Lenders prefer a DTI ratio below 40% to 50%. A high DTI ratio suggests you might be over-leveraged, which increases risk and can lead to loan rejection even if you have a good credit score.
Lenders look at several key factors: 1) Your credit score and repayment history, 2) Monthly net income and stability of employment, 3) Your age (typically between 21 and 60/65 years), 4) Your debt-to-income ratio, and 5) The type of employer you work for (corporate employees, PSU employees, and government staff are often considered low-risk).
In addition to the interest rate, you should watch out for: 1) Processing fees (usually 0.5% to 3% of the loan amount), 2) Prepayment or foreclosure charges (fees for paying off the loan early), 3) Documentation or stamp duty charges, and 4) Late payment fees or bounce charges in case of missed payments.