Investing in Bonds is quite simple, convenient and isn’t as complicated as you may imagine. Gone are the days you would have to reach out to your broker or financial advisor to buy a bond and work on tedious paper heavy process to make your investments in bonds. In this blog you will learn how to invest in bonds online anytime anywhere! Right from the process to invest in bonds to ways and means that can help you pick the right bond that is suited for your investment needs, get all your queries answered here. In case you are new to bond investments and wish to learn more about Bonds, you may first want to watch our video on ‘What are Bonds?’
Before we look at how to buy bonds online It’s important to understand what are the different ways you can invest in bonds.
Through advent of technology, the landscape of Bond investment in India has changed entirely in comparison to the past few years, making the bond market accessible and transparent to individual investors. IndiaBonds simplifies the whole process to invest in bonds by making it completely digital for you without any hassles.
Here are 3 simple steps on how to invest in bonds Online through IndiaBonds
Here’s how you can look for the bonds:
a) Primary market: To invest in the primary market, keep track of the upcoming bond public issues by signing up on our website as well as browsing through the new bond issuances on our Public issue page. If you’re interested to invest in the displayed bonds, click on “Apply Now”, fill and submit the form and complete your payment process. For payments up to INR 5 Lakhs you can transfer via UPI while for application amounts exceeding INR 5 Lakhs, application can be made via ASBA mode (Application Supported by Blocked Amount). To read more details, you can refer to our blog on Bond Public Issue to understand the benefits and payment methods.
b) Secondary Market: To invest in secondary bonds visit the Explore page and choose from the available bond inventories to invest in. The Explore Bonds Page categorizes and buckets all available Bond inventory in the form of the Bond Type. You can choose to browse our curated selection either through Bond type or use the filters to customize your search. Simply choose a bond you’re interested in from a wider variety of bonds such as High Yield Bonds, Government Bonds, Tax Free Bonds, Bank Bonds, PSU Bonds, Capital Gain Bonds, etc.
Bonds can be broadly classified on two metrics:
To read in detail read our article “Types of Bonds in India” where we explain in length on each of these Bond Types
Now that you know how to buy bonds online, if you’re still unsure of where to begin, use our tool to select the bonds that best suit your needs.
The ‘Bonds for You’ tool is a unique feature on IndiaBonds for first time bonds investors that assists investors seeking to set their goals. Basis your responses, it curates a list of bonds that would likely fit your investment requirements. All this while answering 3 simple questions!
Bond Investment Note!
When it comes to investing in bonds, important factors to look at is the Bond Yield and Bond Price. Bond yield calculation can be complicated but you can now calculate it within seconds!
IndiaBonds Bond Calculator helps you to calculate Bond Yield or Bond Price for thousands of bonds in India. Just add the price or yield and the settlement date to get answers. Click here to start calculating or if you need more information or read our blog on “ Online Bond Yield Calculator”
Bonds are not only a great way to diversify your portfolio but also to generate a stable and regular higher income in comparison to traditional fixed income investments like Bank Fixed Deposits and Corporate FDs. Depending your investment needs different types of bonds offer different advantages. E.g.; Bank Bonds can be a better investment alternative to fixed deposits which give lower returns in comparison, State guaranteed bonds can be a better investment alternative to National Savings Certificate, RBI Savings Bonds and Post Office FD. Similarly, sovereign gold bonds are a better investment alternative to investing in physical gold because it helps you earn additional interest along with capital appreciation.
Bonds come with different face values. A Government Of India Bond typically comes with a face value of Rs. 100. An investor can subscribe to multiple units of bonds, which can be as low as Rs.100. However transnationally there are a few limitations that come into play. When it comes to public issue of Bonds that mean when the Bonds are issued in the primary market, the minimum investment amount required for investing is Rs. 10,000 for 10 units. However, if investors are looking at investing in Bonds through the Secondary market then the minimum units to purchase can be as low as 1.
Bonds are flexible when it comes to interest payout frequency options. Investors can choose bonds on the basis of the interest payout frequency offered by the issuer (monthly, quarterly, semi-annually, annually and cumulative).
Listed Bonds can be easily liquidated in case you want to exit your investments. To simply answer, yes, Bonds can be sold before they mature. Most bonds are listed on exchange (BSE / NSE). Therefore, tradeable and can be sold before maturity in the secondary market.
Yes, a Demat account is necessary when investing in bonds to hold your investment.