Introduction
Bond investment has become more accessible, simple, and convenient, than ever before. Initially, buying bonds involved contacting a broker or financial advisor and navigating through a cumbersome paper-based process. In this blog, you’ll discover the smart online way of investing in bonds right from the steps involved in selecting the most suitable bond as per your investment goals to buying the bond.
Investing in bonds is a wise approach to securing predictable returns and upholding a well-diversified investment portfolio. Bonds serve as a secondary income stream and help investors with their cash flow requirements.
Advancements in technology have revolutionized the investment process, making it paperless, efficient, and user-friendly. The online bond platforms (OBPP) empower investors to discover and invest in bonds from the comfort of their homes via mobile or websites. One such OBPP registered with SEBI is our platform- The Fixed Income.
Minimum Investment of Bonds in India
The minimum investment amount required for bonds starts at Rs 10,000. However, the minimum number of bonds may vary among companies. Investors can increase their investment in multiples of the face value of bonds.
How to invest in Bonds through TheFixedIncome Platform
Here are the simple steps on how to invest in bonds online through the TheFixedIncome platform:
- Visit www.thefixedincome.com and register by creating your account.
- Complete your KYC process on www.thefixedincome.com.
- Once you have completed your KYC, you can explore all bonds and then select the ones that match your risk profile.
- It is pertinent to note that you can add up to 10 account members.
5. Once the KYC is approved you can explore a variety of bonds and the ones that match your investment goals. Simply view the product, choose the desired quantity, and proceed to checkout.
6. In step 1 of the checkout page, the issuer’s name, quantity, and settlement amount will be visible. Here you can select the member accounts from the dropdown menu. From the dropdown menu, you can select the names of members in which investment needs to be made. If their KYC status is validated, then proceed to Next; if not, then you have to contact your relationship manager.
7. In step 2 of the checkout process, you’ll have a chance to review your order details one last time before finalizing your purchase.
8. In the final step in the checkout process, you will be notified that your order was placed.
9. In your My Orders section, you can view all your orders, whether placed, pending, confirmed, rejected, etc. The assigned relationship manager will call you to confirm your order. Once it is confirmed, you can view and download the Deal Confirmation.
10. On the All Orders of My Orders page, you can view the status as confirmed once your deal is confirmed.
11. When you click on payment details, you can view all your payment details. There are two options for payment. Option (i) If your settlement amount is less than 2 lacs, you will have to make payment via NEFT or IMPS to the ICCL-HDFC bank account. Option (ii) If your payment is above 2 lacs and above, then you will have to make payment via RTGS to ICCL.
12. After you complete your payment, the “Settled Order” section will show your order status as “Settled.”
13. You can then easily view the bonds in your Portfolio section. Here all your investment details such as the issuer’s names, maturity dates, ratings of the bonds, and product types can be seen.
Please note that you will be notified in emails about your registration with TheFixedIncome, once you have placed your order, once your order is confirmed, and finally when your order is settled.
Conclusion
The Fixed Income offers various fixed-income investments. To access these opportunities, follow the step-by-step guide outlined above. This process ensures secure and smooth transactions on the platform of TheFixedIncome. With the right approach, you can easily navigate the platform and access the diverse opportunities for steady returns.
Hence, by setting clear financial goals, conducting thorough research, and making informed decisions, you can easily create a strong and diversified portfolio. Begin your investment journey toward financial growth and stability with TheFixedIncome today.
Disclaimer: Investments in debt securities/ municipal debt securities/securitized debt instruments are subject to risks including delay and/ or default in payment. Read all the offer-related documents carefully.
FAQs
Q1. Are bonds a good investment option?
Ans. Investing in bonds is regarded as a reliable and favorable option. They offer a steady income with regular interest payments known as coupon payments and the return of principal upon maturity.
Q2. What is the minimum investment required to invest in bonds in India?
Ans. The minimum investment required to invest in bonds in India is Rs.10,000.
Q3. Are bonds a safe investment option?
Ans. Safety holds significant importance in investment decisions, and bonds are often regarded as safer or low-risk investments as compared to other alternatives. Government bonds, backed by the government, are typically considered safer than corporate bonds. When making investment decisions, investors should carefully consider factors such as returns, liquidity, and safety.
Q4. What returns can you expect from investing in bonds?
Ans. Bonds carry a coupon or interest rate, which is usually paid annually as a percentage of the bond’s face value. For instance, if the face value is Rs. 1,00,000 and the interest rate is 7%, you’ll get Rs. 7000 annually.
In the primary market, bonds are mostly issued at face value, offering the same returns as the coupon/interest rate. However, if bonds are purchased in the secondary market, returns may vary depending on whether the price is lower or higher than the face value. This return is measured by a metric called Yield to Maturity (YTM).
Q5. Do you always get a fixed return on a bond?
Ans. If you hold the bonds until maturity, then you can expect a fixed return on your investment. Yet, if you sell the bond before maturity, its price will depend on the current market conditions. If your selling price exceeds your purchase price, your return will likewise be higher, and vice versa. However, the bond market’s liquidity is less compared to the equity market, meaning that you might not get the optimal price if you decide to sell before maturity.
