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How to invest in Bonds | Step by step guide

Introduction 

India is continuing to change its financial landscape in a way that will allow the general public to invest in government bonds, both primary and secondary. 

India’s $1.1 trillion sovereign bond market was recently opened to retail investors.  

Previously, retail investors in India had limited access to government securities because they were only available through a few channels. 

Due to this, more than 35,000 investors have already bought government securities from the Retail Direct platform. 

Further, it is now easier than ever to invest in bonds in India, thanks to online platforms like BondsIndia.  

What is the process to purchase bonds in India 

The steps to purchase bonds in India are: 

  1. Select the bond type

To invest in bonds, investors need to first choose which type they are looking to buy. There are various options such as government bonds, corporate bonds, PSU bonds, zero-coupon bonds, etc. It is essential to choose the right one for their financial goals.  

BondsIndia provides a wide variety of products to investors to select from.  

  1. Select a broker/platform

Once investors have decided on the bond type, they can choose the broker/platform.   

Investors can buy government bonds through RBI Retail Direct Scheme, broker, direct participation, online platforms, NSE and BSE apps, and gilt funds.  

One can buy corporate bonds through online platforms, brokers or mutual funds.  

Where to buy bonds, is an essential question that one is advised to ask themselves.  

There are numerous brokers/platforms from where investors can buy bonds. The only thing that investors need is to find the right broker to purchase bonds from.  

One of the best online bonds platforms to buy bonds online is BondsIndia.  

  1. Open a Demat and Trading account 

Opening a Demat and Trading account is essential to buy bonds. The trading account is used for executing a purchase or sale of a bond and a Demat account, which is short for Dematerialised account, is an online account for holding bonds.

  1. Fulfil the documentation requirements  

Investors are required to complete all Know Your Customer (KYC) formalities before investing. This includes submitting address proof, a copy of their PAN card, a cancelled cheque issued in their name, and a copy of the CMR Demat copy.   

  1. Receive the bond in the Demat account 

Once all the above steps are completed, investors can do transactions in bonds.  

Investors will automatically receive their bond units in their Demat account when the transaction is successful. 

Further, they can make transactions through their trading account, and the bond units will be debited/credited in their Demat account as per their transaction. 

Conclusion 

Having a diversified portfolio is the key to potentially making money on one’s investment. It helps to have multiple forms of income from different sources. One common way to diversify is by investing in bonds. 

Bonds have always been a wise investment for people looking for safety and stability. 

However, they also come with their risks and caveats. Thus, before investing in these products, it is essential to dig into the details to determine which bonds are right for you. 

If you wish to know how to invest in bonds in India, visit BondsIndia.  

 

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