What are Bonds, and how do they work?
Bonds are debt instruments where investors lend money to issuers (government or companies) in exchange for periodic interest payments and the return of the principal amount upon maturity.
Mandatory as per SEBI regulations
Aadhaar Card / Passport / Voter ID / Driving Licence
Cancelled cheque / Bank passbook / 6-month bank statement
Your PAN, Address Proof, and Bank Account Proof will be seamlessly fetched through DigiLocker as a part of our account opening process.
You also need to click a selfie for a liveliness check.
Bonds are fixed-income securities that let you lend money to the government, agencies, or companies for a specific period. In return, the issuer pays interest at regular intervals and returns the principal at maturity. They are generally considered safer than stocks because they offer predictable returns, making them suitable for investors seeking stability.
Investing in bonds also helps diversify your portfolio, creating a balanced mix of assets. By including government bonds, corporate bonds, or non-convertible debentures (NCDs) in your investment strategy, you can access different opportunities and build a more robust financial future.
Bonds are used when a government or a company needs money. Instead of going to a bank, they borrow from people. When you buy a bond, you are giving your money for a fixed time.
During this time, you receive interest at regular intervals. This continues until the bond reaches its end date. Once that happens, the amount you invested is returned.
Bonds are not all the same. They differ based on who issues them and how they are designed. Some are linked to government borrowing, while others are connected to company funding needs.
I prefer fixed-income investments and this app organises the bond section in a way that makes tracking straightforward.
- Shimla
The bonds section is easy to browse even if you're not deeply familiar with fixed-income products. Clear and not overwhelming.
- Udaipur
Reviewing my bond portfolio takes very little time. Everything I need maturity, returns is easy to find.
- Amritsar
Tenure, yield, issuer details.. the important information is all there and well-presented. Helps me compare options more easily.
- Hubli
I've been exploring bonds as a steadier investment option and the app makes it easy to browse what's available without feeling lost.
- Aligarh
Bonds are debt instruments where investors lend money to issuers (government or companies) in exchange for periodic interest payments and the return of the principal amount upon maturity.
Bonds are generally considered safer than stocks because they provide fixed income and experience lower volatility. Government bonds are viewed as highly secure, while corporate bonds carry slightly higher risk but may offer better yields.
Yes, you can sell your bonds before maturity through stock exchanges or the platform where you purchased them. However, the selling price depends on market conditions, and you may receive more or less than the face value.
Bonds and interest rates have an inverse relationship — when interest rates rise, bond prices usually fall, and when interest rates decline, bond prices tend to rise.
The minimum investment amount for Bonds varies depending on the type and issuer. It can range from a few thousand to several lakhs.
Yes, there are tax implications on bond investments. The interest earned from taxable Bonds is subject to income tax, while tax-free Bonds provide tax-exempt interest income. Additionally, capital gains tax may apply when selling Bonds before maturity.
Investing in bonds can be a good idea if you seek stable income and lower risk. They help diversify your portfolio and reduce volatility, especially compared to equities and other high-risk investments.
Different types of bonds include government bonds, corporate bonds, municipal bonds, zero-coupon bonds, and convertible bonds, each offering varying levels of risk, returns, liquidity, and suitability based on your investment goals.
Yield to maturity is calculated by considering the bond’s current market price, coupon payments, face value, and time to maturity, reflecting the total return if the bond is held until maturity.
Bond investing involves risks such as credit risk, where issuers may default, interest rate risk affecting bond prices, and liquidity risk, which may limit your ability to exit investments quickly without losses.
Credit ratings influence bond investments by indicating the issuer’s repayment ability. Higher-rated bonds offer lower risk and returns, while lower-rated bonds provide higher returns but carry increased default risk for investors.
Level up your stock market experience: Scan the QR to download the Bajaj Broking App for effortless investing and trading