Most people stick to fixed deposits or mutual funds. But lately, some have started looking at other options that offer regular income. One of those is corporate bonds. These are not new. But they are becoming easier to understand and invest in, especially with better access to online platforms.
So what are Indian Corporate Bonds and why are more people considering them?
The idea is simple
When companies need money to grow or run their business, they can borrow it from investors. Instead of going to banks, they issue bonds. Think of it like this — you lend your money to the company and in return, they agree to pay you interest for a fixed time. After that, they give your money back.
That’s the basic idea behind corporate bonds.
Why does it matter who issues the bond?
There are many types of bonds in India. Some are issued by the central government. Others come from state governments. Corporate bonds, on the other hand, are issued by companies. These could be private companies or public sector firms.
Since companies carry different business risks than the government, the returns are usually higher. But so is the risk. That’s why it’s important to know who’s borrowing your money.
What should you check before investing?
Every company issuing bonds gets a credit rating. This is a score that tells you how reliable the company is in terms of paying you back. Ratings like AAA, AA and A are considered safer. Anything below that needs more attention.
So, before you put your money into a bond, see who the issuer is and check the rating. This helps you balance return and risk.
What kind of returns can you expect?
Returns vary depending on the company and the rating. A highly rated company might offer 7 to 7.5 percent. A slightly lower-rated one might offer more — sometimes up to 9 percent or higher.
These interest payments usually come every month or quarter. And the full amount comes back at the end of the bond’s term, which could be two years or even ten.
Where can you find these bonds?
Earlier, investing in corporate bonds meant going through a broker or filling forms. That’s changed. Today, platforms let you view available Indian Corporate Bonds online. You can compare them by rating, interest or maturity period.
Some platforms also give calculators. These tools help you understand how much you’ll earn and when.
One last point
Corporate bonds are not a one-size-fits-all product. But they do offer something different — steady returns without the ups and downs of stock markets.
For anyone looking to add stability to their portfolio, especially in a year when fixed deposit rates might drop, these bonds in India are worth a closer look.
