What are Corporate Bonds?
Corporate bonds are debt securities issued by companies to raise capital. When you purchase a corporate bond, you are essentially lending money to the issuing company in exchange for periodic interest payments, known as coupon payments, and the return of the bond’s face value upon maturity. Corporate bonds are an attractive investment option as they often offer higher interest rates compared to government bonds and savings accounts, reflecting the higher risk associated with them.
What are the Benefits of Investing in Corporate Bonds?
Investing in corporate bonds offers several benefits:
Higher Returns: Corporate bonds typically offer higher yields compared to government bonds and fixed deposits.
Regular Income: Investors receive regular interest payments, providing a steady income stream.
Types of Corporate Bonds Available in India
In India, corporate bonds can be classified based on listing status and type of security:
Listed and Unlisted Bonds
Listed Bonds: These bonds are traded on recognized stock exchanges such as the National Stock Exchange (NSE) or Bombay Stock Exchange (BSE). They provide better liquidity and transparency.
Unlisted Bonds: These bonds are not traded on stock exchanges. They might offer higher yields but come with higher liquidity risk.
Types of Security
Secured Bonds: These bonds are backed by the issuer’s assets, providing an additional layer of security for investors.
Unsecured Bonds: These bonds are not backed by collateral and carry a higher risk but might offer higher returns.
Steps to Invest in Corporate Bonds in India
Direct Investment via OBPP (Online Bond Platform Providers)
Research: Begin by researching various corporate bonds available for investment. Pay attention to credit ratings, yields, maturity periods, and issuer reputation.
Choose a Bond: Select a bond that aligns with your investment goals and risk tolerance.
Open an Account: Register with an online bond platform provider (OBPP) like Aspero, Wint Wealth, Grip Invest etc.
Investing Through a Broker
Select a Broker: Choose a reputable broker who deals in corporate bonds.
Open a Trading Account: Complete the account opening process with the broker.
Research Bonds: Work with your broker to identify suitable corporate bonds.
Investing in Corporate Bonds on Aspero: Step-by-Step Guide
Aspero is a popular SEBI registered online bond platform for investing in corporate bonds in India. The platform offers premium fixed income securities such as corporate and government bonds for investment to retail investors, independent financial advisors and large wealth distributors with yields ranging up to 14%. Aspero offers a large variety of investment grade bonds to choose from, carefully curated by their in-house experts and helps investors invest in the bond of their choice in 5 simple stepsHere’s how you can invest through Aspero:
Sign Up: Visit invest.aspero.in or download the Aspero app from Google Play Store or App store. Complete OTP verification with your mobile number to finish signing up. how to buy corporate bonds in india on Aspero
Start your KYC verification: Submit required details to complete your KYC verification. Watch our detailed KYC verification guide here
Frequently Asked Questions
What are the key takeaways from this article?
Corporate bonds are debt securities issued by companies to raise capital. When you purchase a corporate bond, you are essentially lending money to the issuing company in exchange for periodic interest payments, known as coupon payments, and the return of the bond’s face value upon maturity. Corporate bonds are an attractive investment option as they often offer higher interest rates compared to government bonds and savings accounts, reflecting the higher risk associated with them.
Who should read this article?
This article is designed for retail investors, first-time bond buyers, and anyone looking to understand fixed income investments in India.
How does this relate to my investment portfolio?
Understanding these concepts helps you make informed decisions about asset allocation and build a diversified investment portfolio.
