How To Buy Bonds Online?

Bonds are undoubtedly one of the most popular debt instruments in India. They continue to be one of the most efficient ways of capital preservation and generating steady returns. Indeed, it is one of the most preferred means to cushion market fluctuations for most investors.

Regardless, the first step to make the most of this investment option is to find out how to buy bonds online and then proceed to park money with them. With KredX, you can invest in the best and most diverse range of bond instruments online in no time. Read on to find more on this topic.

Bonds – In A Nutshell

Before finding out how to invest in a bond, let’s brush the basics about bonds a little. 

Bonds are essentially high-security fixed income instruments that are issued to raise capital. Usually, entities like the state government, municipality, corporates, etc. can issue a bond to raise funds to finance operations and projects.

Notably, investors who hold a bond are acknowledged as the debtholders or, more specifically, the issuer’s creditors. They also have the legal and financial claim on the issuer’s debt fund. 

Accordingly, issuers are liable to pay the bond’s face value to the investors when the defined term expires. In other words, if the issuer goes bankrupt, the bondholder would still receive a debt recovery payout. On that note, let us proceed to find out how to buy bonds online and in general. 

How To Buy Bonds Online?

In a broader sense, one can purchase bonds in 4 different ways. These are discussed below.

  1. From The Government: Individuals can buy government bonds from either the NSE portal or its mobile app.
  2. Through A Broker: Investors can also buy bonds online from other investors through a broker. Nowadays, several brokers provide their services online. The prices levied on bonds tend to vary from one broker to another. Investors should look for reputed and credible brokers while purchasing bonds. 
  3. Through An ETF Or A Mutual Fund: A bond ETF or fund is a suitable option for those who do not want to invest in an individual bond or wish to diversify their portfolio.
  4. Online Investment Platforms: Individuals who wish to buy bonds online with minimal intervention from relationship managers often prefer online investment platforms like KredX. We serve as a marketplace of investment instruments, like bonds, PMS, and digital gold, where individuals can select from various investment choices. 

Steps To Purchase Bonds On KredX:

Investors can buy bonds online on KredX by following these simple steps –

Step 1 – Log in to the KredX app or online portal

Step 2 – Navigate to the ‘Bonds’ tab

Step 3 – Skim through the list of bonds and select the best-suited option

Step 4 – Select the number of bond units

Step 5 – Click on the ‘Book Now’ button

Once these steps are completed, our relationship manager will get in touch with the investors in no time. This entire process of buying bonds online is initiated and completed digitally and does not require investors to meet our relationship manager in person. 

Benefits Of Investing In Bonds Through KredX:

Besides user-friendly interface and hassle-free steps, these pointers highlight the major benefits of investing in bonds online through the KredX app –

  • Multiple Choices

Investors can gain access to a diverse range of bonds and easily skim through them to pick one that matches their requirements. All the bonds available on KredX’s platform yield high returns. 

  • Favourable Credit Rating

The available bonds are highly credible with a decent credit rating. It lets investors put money into an avenue that is relatively safe and can help generate substantial returns over time. 

  • Ease Of Digital Tracking

The user-friendly interface makes it easier for users to track their investments in bonds. It also helps to manage investment portfolios with greater ease and plan investment strategies accordingly. 

While investing in this avenue has become quick and easier, there are a few things that must be kept in mind alongside knowing how to buy bonds online

Things To Check While Purchasing A Bond:

As an investor, individuals should look for these things when purchasing a bond –

  • Credit Rating

The credit rating of a bond helps to determine whether the issuer can repay timely or not. In other words, credit rating provides an idea about the bonds’ creditworthiness. Note that only credit rating agencies can grade bonds and publish the same. 

  • Bond Duration

One must note that the bond maturity period is a true indicator of bonds’ sensitivity to a change in interest rate. In most cases, a longer duration indicates greater fluctuation in response to a change in interest rate. 

  • Suitability 

Investors should determine which option suits their portfolio before they check how to buy bonds online. Notably, the bond choice should be based on factors like risk tolerance, tax treatment, and income requirements. 

  • Investment Cost

Individuals should also weigh in the cost of investing in bonds along with the brokerage cost. Usually, seasoned investors prefer comparing bonds with similar credit ratings, maturity, and interest rates to pick the most cost-effective bond instrument.

Hence, investing in bonds online is quite simple and hassle-free. However, individuals should weigh the associated pros and cons and their own risk appetite before purchasing any bond.

FAQs on How to Buy Bonds Online

A. Bonds are considered to be an excellent savings instrument for risk-averse and conservative investors. They effectively add an element of stability to a diversified portfolio and, hence, make for a decent investment instrument.