Step By Step Guide To Buy Bonds At KredX Portal

A bond is defined as a debt instrument where an issuer borrows money from the bondholder and, in return, promises to pay a certain interest on a stipulated date. They are issued by the central or state governments, local councils, corporations, and other sovereign bodies. Bonds are touted as the best investment option and can be readily traded on secondary markets like securities. Accordingly, it is a popular investment instrument for risk-averse investors.

As an investor, you can easily sign up on the KredX platform and invest in the best of publicly traded bonds with a click of a button. Additionally, you can track your investments made through our platform by downloading the KredX Invest app and receive timely notifications on the go.

Learn how to invest in bonds by following the given step-by-step guide.

How To Buy Bonds At The KredX Portal?

Follow the given steps to buy bonds from our website.

Step 1: Sign Up

Signing up on KredX is an easy and simple process. Click on the 'Login/Sign Up’ tab and provide your contact details and name on the relevant form.

Step 2: KYC Verification

After you sign up, your assigned relationship manager will contact you to complete the registration. You will need to furnish a few vital documents, and once the same is verified, you will receive an email notification for successful onboarding.

Step 3: Log In

Now you can log in to the KredX website and click on the ‘Bonds’ tab. You can also download the KredX invest app from Google Play or the App Store and log in to choose bonds from your smartphone.

Step 4: Choose From Our List Of Bonds

Take a look at our list of bonds and click on the 'Know More' button to view their details. It is recommended to carefully check the bond yield, tenure, and rating before selecting the number of units you intend to buy.

Step 5: Select The Bonds

After selecting the bonds and number of units to buy, click on the ‘Book Now’ tab.

Step 6: Wait For A Call

After the buying process is complete, a KredX relationship manager will give you a call and guide you through the process.

You can also track your investment through the KredX portal or download the KredX Invest app to simplify the experience.

However, before investing, it is essential for investors to gather some required information about bonds.

What Are Bonds And Where Do You Buy Them?

Bonds are fixed-income instruments issued by governments, corporations, and other sovereign bodies. Bonds are capital market securities where bondholders have a creditor stake in a company. They usually come with pre-determined interest rates, which must be paid at fixed intervals (semi-annually or annually or sometimes monthly).

Generally, investors and experts consider the bond market in India to be less volatile and less risky due to their guaranteed earnings. Therefore, they are suitable for investors with low-risk tolerance or those who want to diversify their investment portfolio.

Bonds are purchased in the primary market from public issues made by large companies/government and in the secondary market from individual investors through exchanges. The latter allows people to get money from a bond before the end of its maturity.

Types Of Bonds Available:

Some of the various types of bonds available on the Indian market include:

Government Securities

Government security (G-Sec) is a tradable instrument issued by either the central government or state governments. They come with a guarantee of debt obligation fulfillment.

There are several types of government securities available in India, including:

  • Government bonds (long-term securities issued by the central government)
  • Treasury bills (short-term money market instruments with no interests)
  • Cash management bills (a new debt instrument with less than 91 days maturity)

Corporate Bonds

Companies issue bonds to fund multiple requirements such as opening new facilities, financing current operations, or entering a new market. Though such bonds pay a regular interest income, they carry a certain credit risk. Also, they offer higher returns when compared to other bond types.

Capital Gains Bonds

These instruments are issued by either the NHAI or RECL and allow investors to transfer their land and house property gains into bonds. In addition, these bonds offer tax exemption under Section 54EC of the Income Tax Act 1961.

Sovereign Gold Bonds

The government of India issues sovereign gold bonds. They come with a guaranteed interest payout that is closely related to the gold price. Therefore, investing in sovereign gold bonds is considered to be a more hassle-free alternative to physical gold.

Inflation-indexed Bonds

These bonds allow investors to make money from inflation. This is because their principal and interest payouts are indexed to inflation. Such bonds often prove useful for hedging inflation risk.

Through KredX, intending investors can purchase high quality bonds and track their investment without much hassle. However, before investing in bonds, it is best to identify one's risk-taking capability and investment goals as an investor to make the most of this income-generating instrument.

FAQs:

A. There are primarily two reasons to invest in bonds - i) It has very low risks compared to other investments ii) It allows investors to diversify their portfolio.