Corporate bonds have become a popular investment choice because they offer relatively stable income streams, and they’re generally less risky than investing in stocks.
As per a report, in 2025, the corporate bond market might reach Rs. 65-70 lakh crore from Rs. 33 lakh crore in 2020.
Corporate bonds are debt instruments issued by corporations. Corporations can raise money for their ongoing operations, M&A, or to expand the business. Investors provide money to the corporations in exchange for interest payments and principal repayment at maturity.
Corporate bonds interest rates in India tend to be higher than other investment options, such as savings accounts, public provident funds, government bonds, fixed deposits etc, thus, giving the investors the potential to earn more returns. Let’s see how to invest in corporate bonds in India.
Where to Buy Corporate Bonds in India?
Individuals can invest in corporate bonds in India in the following ways:
Through a broker, individuals can invest in corporate bonds. They can ask their existing broker to place an order for them or open an account with another broker.
In this method, the individual is required to have complete knowledge of the corporate bond they are buying.
2. Online platforms
Bonds Trading Online platforms are an excellent way by which individuals can buy corporate bonds in India.
Nowadays, online platforms are gaining immense popularity because of their ease of use. They also provide research to investors to make an informed decision.
Investors can buy corporate bonds from BondsIndia, one of the best online platforms.
3. Mutual funds
Investors who do not have time and knowledge can invest in corporate bonds through mutual funds or exchange-traded funds (ETFs).
Corporate bond funds are mutual funds that invest in multiple corporate bonds. Bond funds offer investors the opportunity to spread their risk as the investment is made in numerous companies, thus reducing the overall risk of an investor’s portfolio.
There are many corporate bond funds available in the market. Investors are advised to select the bonds, from different types of bonds, which suit their risk profile and goals.
Who can invest in corporate bonds?
Corporate bonds can be a solid investment for those looking for stable, predictable returns and are comfortable taking on a moderate amount of risk.
Corporate bonds are also a good option for those who are looking for a more diversified investment portfolio to reduce risk and volatility.
Ultimately, the best answer to the question of who can invest in corporate bonds will vary from person to person. Some factors that might be important to consider include, the investor’s age, investment goals, and overall risk tolerance.
Investors have various options to select from when it comes to investing, one of them is corporate bonds.
However, when investing in corporate bonds, it is essential to examine the credit rating of the company. Bonds with a higher credit rating will offer a lower interest rate, while those with a lower credit rating will have a higher interest rate. It is also important to consider the tenure of the bond. Bonds with a shorter tenure will have a higher interest rate than those with a longer tenure.
It is also advised that investors do their research before making an investment decision.