{"id":28009,"date":"2026-06-06T10:12:03","date_gmt":"2026-06-06T10:12:03","guid":{"rendered":"https:\/\/wp-api.pocketful.in\/blog\/?p=28009"},"modified":"2026-06-06T10:12:04","modified_gmt":"2026-06-06T10:12:04","slug":"how-to-buy-and-sell-bonds-in-india","status":"publish","type":"post","link":"https:\/\/wp-api.pocketful.in\/blog\/how-to-buy-and-sell-bonds-in-india\/","title":{"rendered":"How to Buy and Sell Bonds in India?"},"content":{"rendered":"\n<p class=\"wp-block-paragraph\">Most Indian investors know about stocks and mutual funds, but bonds? That conversation rarely happens. The irony is that India&#8217;s bond market is massive, and retail access has improved a lot over the past three years. If you&#8217;ve been trying to figure out how to buy bonds in India but kept running into jargon and complicated processes, this guide cuts through all of it. From picking the right bond to actually selling it before maturity, we cover the whole thing.<\/p>\n\n\n\n<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_65 counter-hierarchy ez-toc-counter ez-toc-transparent ez-toc-container-direction\">\n<div class=\"ez-toc-title-container\">\n<p class=\"ez-toc-title \" >Table of Contents<\/p>\n<span class=\"ez-toc-title-toggle\"><a href=\"#\" class=\"ez-toc-pull-right ez-toc-btn ez-toc-btn-xs ez-toc-btn-default ez-toc-toggle\" aria-label=\"Toggle Table of Content\"><span class=\"ez-toc-js-icon-con\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #999;color:#999\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #999;color:#999\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/span><\/a><\/span><\/div>\n<nav><ul class='ez-toc-list ez-toc-list-level-1 ' ><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/wp-api.pocketful.in\/blog\/how-to-buy-and-sell-bonds-in-india\/#What_Exactly_Is_a_Bond\" title=\"What Exactly Is a Bond?\">What Exactly Is a Bond?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/wp-api.pocketful.in\/blog\/how-to-buy-and-sell-bonds-in-india\/#Types_of_Bonds_in_India\" title=\"Types of Bonds in India\">Types of Bonds in India<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/wp-api.pocketful.in\/blog\/how-to-buy-and-sell-bonds-in-india\/#Documents_and_Accounts_You_Need\" title=\"Documents and Accounts You Need\">Documents and Accounts You Need<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-4\" href=\"https:\/\/wp-api.pocketful.in\/blog\/how-to-buy-and-sell-bonds-in-india\/#How_to_Buy_Bonds_in_India_4_Ways_to_Do_It\" title=\"How to Buy Bonds in India: 4 Ways to Do It\">How to Buy Bonds in India: 4 Ways to Do It<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-5\" href=\"https:\/\/wp-api.pocketful.in\/blog\/how-to-buy-and-sell-bonds-in-india\/#How_to_Buy_Bonds_in_India_Step_by_Step\" title=\"How to Buy Bonds in India: Step by Step\">How to Buy Bonds in India: Step by Step<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-6\" href=\"https:\/\/wp-api.pocketful.in\/blog\/how-to-buy-and-sell-bonds-in-india\/#How_to_Sell_Bonds_Before_Maturity\" title=\"How to Sell Bonds Before Maturity\">How to Sell Bonds Before Maturity<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-7\" href=\"https:\/\/wp-api.pocketful.in\/blog\/how-to-buy-and-sell-bonds-in-india\/#What_Affects_Bond_Prices_When_You_Sell\" title=\"What Affects Bond Prices When You Sell\">What Affects Bond Prices When You Sell<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-8\" href=\"https:\/\/wp-api.pocketful.in\/blog\/how-to-buy-and-sell-bonds-in-india\/#Tax_on_Bond_Income\" title=\"Tax on Bond Income\">Tax on Bond Income<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-9\" href=\"https:\/\/wp-api.pocketful.in\/blog\/how-to-buy-and-sell-bonds-in-india\/#How_to_Invest_in_Bond_Mutual_Funds\" title=\"How to Invest in Bond Mutual Funds\">How to Invest in Bond Mutual Funds<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-10\" href=\"https:\/\/wp-api.pocketful.in\/blog\/how-to-buy-and-sell-bonds-in-india\/#Conclusion\" title=\"Conclusion\">Conclusion<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-11\" href=\"https:\/\/wp-api.pocketful.in\/blog\/how-to-buy-and-sell-bonds-in-india\/#Frequently_Asked_Questions_FAQs\" title=\"Frequently Asked Questions (FAQs)\">Frequently Asked Questions (FAQs)<\/a><\/li><\/ul><\/nav><\/div>\n<h2 id=\"h-what-exactly-is-a-bond\" class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"What_Exactly_Is_a_Bond\"><\/span>What Exactly Is a Bond?<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p class=\"wp-block-paragraph\">Think of it this way. When a company or government needs money, they have two choices: borrow from a bank or borrow directly from investors. Bonds are how they borrow from investors like you.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">You lend them money. They agree to pay you a fixed interest (called a coupon) at regular intervals. At the end of the tenure, you get your principal back. That&#8217;s the full deal.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">The appeal is predictability. A corporate bond paying 9.2% per year pays exactly that. There&#8217;s no uncertainty like equity, no NAV movement like mutual funds. For people who want a stable income, retired investors, especially, certainty matters a lot.<\/p>\n\n\n\n<h2 id=\"h-types-of-bonds-in-india\" class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Types_of_Bonds_in_India\"><\/span>Types of Bonds in India<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p class=\"wp-block-paragraph\">Not all bonds work the same way. Knowing what&#8217;s available helps you pick what actually fits your goal.<\/p>\n\n\n\n<figure class=\"wp-block-table has-small-font-size\"><table><thead><tr><th class=\"has-text-align-left\" data-align=\"left\">Bond Type<\/th><th class=\"has-text-align-center\" data-align=\"center\">Who Issues It<\/th><th class=\"has-text-align-center\" data-align=\"center\">Tenure<\/th><th class=\"has-text-align-center\" data-align=\"center\">Risk<\/th><\/tr><\/thead><tbody><tr><td class=\"has-text-align-left\" data-align=\"left\"><strong>Government Securities (G-Secs)<\/strong><\/td><td class=\"has-text-align-center\" data-align=\"center\">Central Government<\/td><td class=\"has-text-align-center\" data-align=\"center\">5 to 40 years<\/td><td class=\"has-text-align-center\" data-align=\"center\">Very Low<\/td><\/tr><tr><td class=\"has-text-align-left\" data-align=\"left\"><strong>State Development Loans (SDLs)<\/strong><\/td><td class=\"has-text-align-center\" data-align=\"center\">State Governments<\/td><td class=\"has-text-align-center\" data-align=\"center\">Up to 30 years<\/td><td class=\"has-text-align-center\" data-align=\"center\">Very Low<\/td><\/tr><tr><td class=\"has-text-align-left\" data-align=\"left\"><strong>PSU Bonds<\/strong><\/td><td class=\"has-text-align-center\" data-align=\"center\">Public Sector Companies<\/td><td class=\"has-text-align-center\" data-align=\"center\">3 to 15 years<\/td><td class=\"has-text-align-center\" data-align=\"center\">Low<\/td><\/tr><tr><td class=\"has-text-align-left\" data-align=\"left\"><strong>Corporate Bonds<\/strong><\/td><td class=\"has-text-align-center\" data-align=\"center\">Listed Private\/Public Companies<\/td><td class=\"has-text-align-center\" data-align=\"center\">1 to 10 years<\/td><td class=\"has-text-align-center\" data-align=\"center\">Moderate<\/td><\/tr><tr><td class=\"has-text-align-left\" data-align=\"left\"><strong>Non-Convertible Debentures (NCDs)<\/strong><\/td><td class=\"has-text-align-center\" data-align=\"center\">Companies via public issue<\/td><td class=\"has-text-align-center\" data-align=\"center\">2 to 10 years<\/td><td class=\"has-text-align-center\" data-align=\"center\">Moderate to High<\/td><\/tr><tr><td class=\"has-text-align-left\" data-align=\"left\"><strong>Municipal Bonds<\/strong><\/td><td class=\"has-text-align-center\" data-align=\"center\">Urban Local Bodies<\/td><td class=\"has-text-align-center\" data-align=\"center\">3 to 10 years<\/td><td class=\"has-text-align-center\" data-align=\"center\">Low to Moderate<\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n<p class=\"wp-block-paragraph\">G-Secs carry sovereign backing, which means the Central Government guarantees repayment. Corporate bonds and NCDs offer better yields, but credit risk varies by issuer. Always check the credit rating before putting money into any corporate bond.<\/p>\n\n\n\n<h2 id=\"h-documents-and-accounts-you-need\" class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Documents_and_Accounts_You_Need\"><\/span>Documents and Accounts You Need<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p class=\"wp-block-paragraph\">Getting started with bond investing doesn&#8217;t take long. Here&#8217;s what you need in place:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>A Demat account with NSDL or CDSL, where bonds are held electronically, so this is non-negotiable<\/li>\n\n\n\n<li>A trading account if you plan to buy through NSE or BSE<\/li>\n\n\n\n<li>KYC documents: PAN card, Aadhaar, and bank account details<\/li>\n\n\n\n<li>An RBI Retail Direct account if you&#8217;re going the government securities route without a broker<\/li>\n<\/ul>\n\n\n\n<p class=\"wp-block-paragraph\">If you already trade stocks, your existing Demat and trading accounts work for bonds too.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>Read Also: <\/strong><a href=\"https:\/\/www.pocketful.in\/blog\/government-bonds-in-india\/\">Government Bonds India<\/a><\/p>\n\n\n\n<h2 id=\"h-how-to-buy-bonds-in-india-4-ways-to-do-it\" class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"How_to_Buy_Bonds_in_India_4_Ways_to_Do_It\"><\/span>How to Buy Bonds in India: 4 Ways to Do It<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<h3 id=\"h-1-through-rbi-retail-direct\" class=\"wp-block-heading has-medium-font-size\">1. Through RBI Retail Direct<\/h3>\n\n\n\n<p class=\"wp-block-paragraph\">The RBI launched this platform in November 2021 after years of the government securities market being practically inaccessible for retail investors. You open a free Retail Direct Gilt (RDG) account and participate directly in primary auctions for G-Secs, T-Bills, SDLs, and Sovereign Gold Bonds.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">No broker. No middleman. No fees. You&#8217;re buying directly from the government at the auction price.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">The platform also has a secondary market segment through NDS-OM (Negotiated Dealing System &#8211; Order Matching) where you can buy and sell G-Secs between auctions. Useful if you want liquidity without waiting for a new issuance.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Good for investors who want pure government paper with no credit risk and zero distribution cost.<\/p>\n\n\n\n<h3 id=\"h-2-through-nse-or-bse\" class=\"wp-block-heading has-medium-font-size\">2. Through NSE or BSE<\/h3>\n\n\n\n<p class=\"wp-block-paragraph\">Both exchanges have a bond segment. NSE&#8217;s goBID and BSE Direct are the relevant platforms for retail investors. If you have an existing trading account, you log in, search for the bond by name or ISIN, check the live market price and yield, and place a buy order exactly the way you&#8217;d buy a stock.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Settlement for G-Secs happens on T+1. For corporate bonds it&#8217;s usually T+2.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">The advantage here is the convenience &#8211; one platform, one account, access to both government and corporate bonds. Liquidity depends on how actively a bond is traded. Some bonds see thin volumes on the exchange, which can make buying at a fair price tricky.<\/p>\n\n\n\n<h3 id=\"h-3-through-a-sebi-registered-obpp\" class=\"wp-block-heading has-medium-font-size\">3. Through a SEBI-Registered OBPP<\/h3>\n\n\n\n<p class=\"wp-block-paragraph\">SEBI brought in a framework for Online Bond Platform Providers (OBPPs) specifically to regulate the retail bond market. Platforms registered under this framework can only list bonds that meet SEBI&#8217;s compliance standards.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">On these platforms, you browse a curated inventory of corporate bonds, filter by yield, credit rating, and tenure, compare options, and invest. Some also support secondary market selling, you submit your bond details and they find you a buyer.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Before investing on any bond platform, check that it&#8217;s SEBI-registered. Unregistered platforms have no regulatory accountability and carry substantially higher risk. The SEBI registration number should be clearly displayed on their website.<\/p>\n\n\n\n<h3 id=\"h-4-through-your-bank\" class=\"wp-block-heading has-medium-font-size\">4. Through Your Bank<\/h3>\n\n\n\n<p class=\"wp-block-paragraph\">Some banks in India operate gilt accounts and act as intermediaries for government bond auctions. If you prefer managing everything through your bank, this route works without needing a separate broker account.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Banks also distribute certain corporate bonds and NCDs during public issues. These are usually marketed as fixed-return products with a stated tenure and coupon. The process is straightforward: fill out an application, submit KYC, and your allotment will reflect in your Demat.<\/p>\n\n\n\n<h2 id=\"h-how-to-buy-bonds-in-india-step-by-step\" class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"How_to_Buy_Bonds_in_India_Step_by_Step\"><\/span>How to Buy Bonds in India: Step by Step<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p class=\"wp-block-paragraph\" id=\"h-step-1-open-a-demat-account\"><strong>Step 1: Open a Demat Account<\/strong><\/p>\n\n\n\n<p class=\"wp-block-paragraph\">A Demat account is the starting point. Open one with a registered depository participant, your existing stockbroker likely offers this. The process is online and usually takes under 30 minutes.<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Submit PAN and Aadhaar for KYC verification<\/li>\n\n\n\n<li>Link your savings bank account for fund transfers<\/li>\n\n\n\n<li>Note your DP ID and client ID once the account is active<\/li>\n<\/ul>\n\n\n\n<p class=\"wp-block-paragraph\" id=\"h-step-2-pick-your-platform\"><strong>Step 2: Pick Your Platform<\/strong><\/p>\n\n\n\n<p class=\"wp-block-paragraph\">For government securities, RBI Retail Direct or NSE goBID are the most direct options. For corporate bonds and NCDs, a SEBI-registered OBPP gives you a wider range to browse and compare. Your broker&#8217;s trading platform also works if bonds are listed on the exchange.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\" id=\"h-step-3-research-before-you-commit\"><strong>Step 3: Research Before You Commit<\/strong><\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Don&#8217;t pick a bond based on yield alone. Check all of these before placing an order:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>Credit rating:<\/strong> AAA is the best; stay cautious below AA for corporate bonds<\/li>\n\n\n\n<li><strong>Yield to Maturity (YTM): <\/strong>This is your actual annualised return if held till maturity, not just the coupon rate<\/li>\n\n\n\n<li><strong>Coupon frequency:<\/strong> monthly, quarterly, semi-annual, or annual interest payouts affect your cash flow planning<\/li>\n\n\n\n<li><strong>Liquidity:<\/strong> if a bond trades with thin volumes on the exchange, exiting before maturity at a fair price becomes difficult<\/li>\n\n\n\n<li><strong>Tenure match:<\/strong> A 10-year bond in a rising rate environment is a very different risk than a 2-year bond.<\/li>\n<\/ul>\n\n\n\n<p class=\"wp-block-paragraph\" id=\"h-step-4-place-the-order\"><strong>Step 4: Place the Order<\/strong><\/p>\n\n\n\n<p class=\"wp-block-paragraph\">On exchanges, you place a market or limit buy order. On OBPPs, you confirm the investment through the platform&#8217;s checkout process. On RBI Retail Direct, you submit a non-competitive bid during the auction window and you&#8217;ll get allotted at the cut-off price.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\" id=\"h-step-5-monitor-your-investment\"><strong>Step 5: Monitor Your Investment<\/strong><\/p>\n\n\n\n<p class=\"wp-block-paragraph\">After settlement, the bonds show up in your Demat account. Coupon payments land directly in your linked bank account on the scheduled dates. Track the current market price versus your purchase price from your broker or platform dashboard.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>Read Also: <\/strong><a href=\"https:\/\/www.pocketful.in\/blog\/what-are-bond-valuation\/\">What are Bond Valuation?<\/a><\/p>\n\n\n\n<h2 id=\"h-how-to-sell-bonds-before-maturity\" class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"How_to_Sell_Bonds_Before_Maturity\"><\/span>How to Sell Bonds Before Maturity<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p class=\"wp-block-paragraph\">Bonds don&#8217;t have to sit till maturity. Most listed bonds can be sold in the secondary market whenever you need liquidity or want to exit a position.<\/p>\n\n\n\n<h3 id=\"h-1-selling-on-a-stock-exchange\" class=\"wp-block-heading has-medium-font-size\">1. Selling on a Stock Exchange<\/h3>\n\n\n\n<p class=\"wp-block-paragraph\">Log into your trading account and go to your bond holdings. Select the bond you want to sell and place a sell order. The exchange matches your order with a buyer through its order book.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Once executed, the bond leaves your Demat account and the proceeds are credited to your account. G-Secs settle on T+1, corporate bonds on T+2.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">One thing to be aware of, if a bond doesn&#8217;t trade actively on the exchange, you may not find a buyer quickly or may have to accept a lower price to get the trade done.<\/p>\n\n\n\n<h3 id=\"h-2-selling-through-an-obpp\" class=\"wp-block-heading has-medium-font-size\">2. Selling Through an OBPP<\/h3>\n\n\n\n<p class=\"wp-block-paragraph\">Some SEBI-registered platforms have a dedicated sell section. You enter the bond&#8217;s ISIN, quantity, and your expected price. The platform reviews your request, connects you with a potential buyer, and processes settlement through the clearing corporation, typically ICCL (Indian Clearing Corporation Limited).<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">The bond units are blocked in your Demat until the buyer&#8217;s payment is confirmed. Once the transaction settles, proceeds will be credited to your registered bank account.<\/p>\n\n\n\n<h3 id=\"h-3-selling-g-secs-through-rbi-retail-direct\" class=\"wp-block-heading has-medium-font-size\">3. Selling G-Secs Through RBI Retail Direct<\/h3>\n\n\n\n<p class=\"wp-block-paragraph\">If you bought G-Secs through Retail Direct and they&#8217;re sitting in your RDG account, you sell them through the NDS-OM platform on the Retail Direct portal. Place a sell order, the system finds a matching buyer, and settlement happens on T+1.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">One important point: bonds held in physical certificate form cannot be traded on any electronic platform. Old paper bond certificates need to be converted to Demat form first.<\/p>\n\n\n\n<h2 id=\"h-what-affects-bond-prices-when-you-sell\" class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"What_Affects_Bond_Prices_When_You_Sell\"><\/span>What Affects Bond Prices When You Sell<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p class=\"wp-block-paragraph\">Your sale price in the secondary market won&#8217;t always match your original purchase price. Bond prices move for several reasons:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>RBI rate decisions<\/strong>: when interest rates go up, existing bond prices fall because newer bonds now offer better yields. Rates go down, your bond price rises.<\/li>\n\n\n\n<li><strong>Credit rating changes<\/strong>: a downgrade on the issuing company drops market value fast. An upgrade does the opposite.<\/li>\n\n\n\n<li><strong>How much time is left<\/strong>: Longer-duration bonds are far more sensitive to rate movements than short-tenure ones<\/li>\n\n\n\n<li><strong>Market liquidity<\/strong>: If buyers are scarce for your bond, the bid-ask spread widens and you sell below fair value<\/li>\n<\/ul>\n\n\n\n<p class=\"wp-block-paragraph\">A practical example: if you bought a 10-year G-Sec in a low-rate environment and the RBI subsequently hiked rates significantly, the market price of that bond would have fallen. Selling at that point means booking a capital loss, even though the government hasn&#8217;t defaulted on anything.<\/p>\n\n\n\n<h2 id=\"h-tax-on-bond-income\" class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Tax_on_Bond_Income\"><\/span>Tax on Bond Income<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p class=\"wp-block-paragraph\">Two types of tax apply to bonds &#8211; interest income tax and capital gains tax.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Interest income (coupon payments) is added to your total income and taxed at your applicable income tax slab. If you&#8217;re in the 30% bracket, your bond interest is taxed at 30%, regardless of bond type.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Capital gains tax depends on how long you held the bond and whether it&#8217;s listed or unlisted:<\/p>\n\n\n\n<figure class=\"wp-block-table has-small-font-size\"><table><thead><tr><th>Bond Type<\/th><th>Holding Period<\/th><th>Tax Rate<\/th><\/tr><\/thead><tbody><tr><td>Listed Bonds<\/td><td>Under 12 months<\/td><td>Slab rate (STCG)<\/td><\/tr><tr><td>Listed Bonds<\/td><td>Over 12 months<\/td><td>12.5% without indexation (LTCG)<\/td><\/tr><tr><td>Unlisted Bonds<\/td><td>Under 24 months<\/td><td>Slab rate (STCG)<\/td><\/tr><tr><td>Unlisted Bonds<\/td><td>Over 24 months<\/td><td>12.5% without indexation (LTCG)<\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n<p class=\"wp-block-paragraph\">Listed bonds have a shorter qualifying period for LTCG and also fall under SEBI&#8217;s grievance mechanism, another reason to prefer listed bonds over unlisted ones.<\/p>\n\n\n\n<h2 id=\"h-how-to-invest-in-bond-mutual-funds\" class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"How_to_Invest_in_Bond_Mutual_Funds\"><\/span>How to Invest in Bond Mutual Funds<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p class=\"wp-block-paragraph\">Not comfortable buying individual bonds directly? Bond mutual funds are a practical alternative. <a href=\"https:\/\/www.pocketful.in\/blog\/debt-mutual-funds\/\">Debt mutual funds<\/a> invest in government securities, corporate bonds, and money market instruments on your behalf, giving you exposure to the bond market without needing to research individual issuers or manage a Demat holding yourself.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Pocketful lets you invest in bond and debt mutual funds with zero commission. Here&#8217;s how to get started:<\/p>\n\n\n\n<p class=\"wp-block-paragraph\" id=\"h-step-1-create-your-account\"><strong>Step 1: Create Your Account<\/strong><\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><a href=\"https:\/\/play.google.com\/store\/apps\/details?id=in.pocketful.android\">Download the Pocketful app<\/a> and complete your sign-up in a few minutes.<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Enter your mobile number and verify with OTP<\/li>\n\n\n\n<li>Set your login credentials<\/li>\n\n\n\n<li>Access your personal dashboard<\/li>\n<\/ul>\n\n\n\n<p class=\"wp-block-paragraph\" id=\"h-step-2-complete-your-kyc\"><strong>Step 2: Complete Your KYC<\/strong><\/p>\n\n\n\n<p class=\"wp-block-paragraph\">KYC is mandatory before investing in any mutual fund in India. On Pocketful, the entire process is paperless and online.<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Add your PAN and Aadhaar details<\/li>\n\n\n\n<li>Enter your bank account information<\/li>\n\n\n\n<li>Complete verification digitally<\/li>\n<\/ul>\n\n\n\n<p class=\"wp-block-paragraph\" id=\"h-step-3-browse-debt-and-bond-mutual-funds\"><strong>Step 3: Browse Debt and Bond Mutual Funds<\/strong><\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Once your account is active, explore fund options based on your investment horizon and risk appetite.<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Choose from liquid funds, short-duration funds, gilt funds, corporate bond funds, or dynamic bond funds<\/li>\n\n\n\n<li>Compare expense ratios, YTM of the portfolio, and credit quality<\/li>\n\n\n\n<li>Check rolling returns vs benchmark before finalising<\/li>\n<\/ul>\n\n\n\n<p class=\"wp-block-paragraph\" id=\"h-step-4-start-your-sip-or-lump-sum-investment\"><strong>Step 4: Start Your SIP or Lump Sum Investment<\/strong><\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Decide how you want to invest, a fixed monthly SIP or a one-time lump sum. SIPs in debt funds can start from as little as \u20b9100 per month.<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Set your SIP amount and date<\/li>\n\n\n\n<li>Choose the fund and confirm your investment<\/li>\n\n\n\n<li>Track NAV, returns, and portfolio from your <a href=\"https:\/\/www.pocketful.in\/\">Pocketful <\/a>dashboard.<\/li>\n<\/ul>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>Read Also: <\/strong><a href=\"https:\/\/www.pocketful.in\/blog\/what-are-bond-yields\/\">What are Bond Yields?<\/a><\/p>\n\n\n\n<h2 id=\"h-conclusion\" class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Conclusion\"><\/span>Conclusion<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p class=\"wp-block-paragraph\">Bond investing in India has come a long way from being a product only institutions and wealthy individuals could access. RBI Retail Direct, NSE goBID, SEBI-regulated OBPPs , retail investors now have genuine options across government and corporate bonds. Learning how to buy bonds in India is straightforward once you understand the available routes. And knowing how to sell bonds before maturity, what drives price movement, and how taxation works gives you the full picture before committing any capital.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Start your bond investing journey with Pocketful, invest in bond funds with zero commission, so you keep more of what the market gives you.&nbsp;<\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><em>Disclaimer: This article is for educational purposes only. Bond investments are subject to market and credit risks. Please read all offer documents carefully before investing.<\/em><\/p>\n\n\n\n<figure class=\"wp-block-table has-small-font-size\"><table><thead><tr><th class=\"has-text-align-left\" data-align=\"left\">S.NO.<\/th><th class=\"has-text-align-left\" data-align=\"left\">Check Out These Interesting Posts You Might Enjoy!<\/th><\/tr><\/thead><tbody><tr><td class=\"has-text-align-left\" data-align=\"left\">1<\/td><td class=\"has-text-align-left\" data-align=\"left\"><a href=\"https:\/\/www.pocketful.in\/blog\/what-are-war-bonds\/\">What are War Bonds?<\/a><\/td><\/tr><tr><td class=\"has-text-align-left\" data-align=\"left\">2<\/td><td class=\"has-text-align-left\" data-align=\"left\"><a href=\"https:\/\/www.pocketful.in\/blog\/what-is-sovereign-gold-bonds\/\">What is Sovereign Gold Bonds?<\/a><\/td><\/tr><tr><td class=\"has-text-align-left\" data-align=\"left\">3<\/td><td class=\"has-text-align-left\" data-align=\"left\"><a href=\"https:\/\/www.pocketful.in\/blog\/what-is-coupon-bond\/\">What is Coupon Bond?<\/a><\/td><\/tr><tr><td class=\"has-text-align-left\" data-align=\"left\">4<\/td><td class=\"has-text-align-left\" data-align=\"left\"><a href=\"https:\/\/www.pocketful.in\/blog\/what-is-insurance-bond\/\">What is Insurance Bond?<\/a><\/td><\/tr><tr><td class=\"has-text-align-left\" data-align=\"left\">5<\/td><td class=\"has-text-align-left\" data-align=\"left\"><a href=\"https:\/\/www.pocketful.in\/blog\/what-are-social-bonds\/\">What are Social Bonds?<\/a><\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n<h2 id=\"h-frequently-asked-questions-faqs\" class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Frequently_Asked_Questions_FAQs\"><\/span>Frequently Asked Questions (FAQs)<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n<div class=\"saswp-faq-block-section\"><ol style=\"list-style-type:none\"><li style=\"list-style-type: none\"><h3 class=\"\"><strong>Can I buy bonds without a Demat account?<\/strong>\u00a0<\/h3><p class=\"saswp-faq-answer-text\">No. Bonds in India are held in electronic form and a Demat account registered with NSDL or CDSL is mandatory. The only partial exception is RBI Retail Direct, which maintains its own RDG account, but even that is essentially a digital holding.<\/p><li style=\"list-style-type: none\"><h3 class=\"\"><strong>What is the minimum amount to invest in bonds?<\/strong><\/h3><p class=\"saswp-faq-answer-text\">It depends on the bond type. Government securities on RBI Retail Direct start from \u20b910,000. Many corporate bonds on OBPPs also start from \u20b910,000 following SEBI&#8217;s revised minimum face value norms. Some NCDs during public issues may have a lower minimum.<\/p><li style=\"list-style-type: none\"><h3 class=\"\"><strong>Are bonds safer than mutual funds?<\/strong>\u00a0<\/h3><p class=\"saswp-faq-answer-text\">Not necessarily in all cases. Government bonds are among the safest instruments in India, sovereign-backed and practically default-free. Corporate bonds carry credit risk. A poorly rated corporate bond can default, which mutual funds with diversified portfolios are less exposed to. Safety depends on which bond you pick.<\/p><li style=\"list-style-type: none\"><h3 class=\"\"><strong>Can I sell a bond before its maturity date<\/strong><\/h3><p class=\"saswp-faq-answer-text\">Yeah, you can definitely sell a bond before it matures if it&#8217;s listed and held in a Demat account. You can either sell it through the exchange, or if you&#8217;ve got an Offline Block deal, you can do that too &#8211; but it needs to be in Demat form. The price you get will depend on loads of factors &#8211; what&#8217;s currently happening in the market, interest rates, how easy or hard it is to sell, and the like. You might find some bonds are a bit harder to sell, and there may not be many people looking to buy them.<\/p><li style=\"list-style-type: none\"><h3 class=\"\"><strong>How does bond interest get paid out<\/strong><\/h3><p class=\"saswp-faq-answer-text\">Coupon payments just get deposited straight into the bank account that&#8217;s registered with the bond &#8211; and that&#8217;s on the dates specified in the bond&#8217;s terms. So if it&#8217;s a bond that pays out monthly, quarterly, 6 monthly or annually &#8211; that&#8217;s when you can expect to see the cash rolling in. And the good news is you don&#8217;t have to lift a finger to get it &#8211; it&#8217;ll just turn up in your account.<\/p><\/ul><\/div>\n\n\n<p class=\"wp-block-paragraph\"><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Most Indian investors know about stocks and mutual funds, but bonds? That conversation rarely happens. The irony is that India&#8217;s bond market is massive, and retail access has improved a lot over the past three years. If you&#8217;ve been trying to figure out how to buy bonds in India but kept running into jargon and [&hellip;]<\/p>\n","protected":false},"author":11,"featured_media":28075,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"inline_featured_image":false,"is_paper_insight":false,"paper_insight_image":0,"paper_insight_pdf":0,"paper_insight_ppt":0,"footnotes":""},"categories":[15],"tags":[],"class_list":["post-28009","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-investing"],"acf":{"freelancer":"Not Added"},"yoast_head":"<!-- This site is optimized with the Yoast SEO Premium plugin v20.13 (Yoast SEO v21.2) - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>How to Buy and Sell Bonds in India?<\/title>\n<meta name=\"description\" content=\"How to buy bonds in India through RBI Retail Direct, NSE, BSE, and bond platforms. 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