How to buy Bonds Online: A Step-by-Step Guide?

A Comprehensive Guide to Seamlessly Buy Bonds Online

Investing in bonds has gained momentum due to their lower volatility and predictable returns. While stocks dominate the investment landscape in India, bonds are becoming increasingly popular. In this step-by-step guide, we will explore different avenues for investing in bonds online, catering to both beginners and seasoned investors.

1. Stockbrokers: Just like stocks, bonds can be subscribed to through stockbrokers. Many established stockbrokers and fintech companies now offer user-friendly platforms for bond investments. Opening a Demat and trading account is a prerequisite for trading in bonds through this channel.

2. Mutual Funds/Debt ETFs: For a more indirect approach, investors can consider mutual funds and debt ETFs. These investment vehicles pool investors' savings and allocate them to various bonds. Debt ETFs, linked to an index, offer a straightforward route for beginners.

3. RBI Retail Direct: The Reserve Bank of India (RBI) provides a platform, Retail Direct, where government bonds can be purchased directly. Investors need to open a retail direct gilt account with the RBI, making the process more accessible.

4. Stock Exchanges: Government bonds can also be subscribed to via stock exchanges such as NSE goBID and BSE Direct online platforms. The subscription is done through the non-competitive bidding route in the primary market.

5. Bond Platforms: Bond platforms like BondsIndia.com simplify the process of investing in various fixed-income instruments. These platforms offer a one-stop solution for trading in government, corporate, and perpetual bonds.

How to Buy Bonds on a Bond Platform - BondsIndia.com:

1. Visit the Bond Platform: Go to the bond platform's website, such as https://www.bondsindia.com.

2. Create an Account and KYC: Sign up on the platform and complete the KYC requirements. Visit client.bondsindia.com for KYC completion.

3. Aadhar and PAN Card Verification: Provide Aadhar and PAN card details for KYC and address verification.

4. Demat Details Verification: After successful KYC, provide Demat details for verification. A Demat and trading account is essential for buying and selling bonds.

5. Bank Account Verification: Verify your bank account, and upon completion, provide an e-signature to authenticate the details.

6. Start Investing: Once the account opening process is successful, you can start investing in bonds through the platform.

7. Explore and Purchase: Browse through the available bonds and make a purchase using secure online payment methods. The platform may offer filters to streamline your search.

8. Secure Online Payment: Purchase the selected bond through a secure and hassle-free online payment method.

How to Buy Govt Securities via the RBI Retail Direct Platform:

1. Registration on RBI Retail Platform: Retail investors need to register on the RBI Retail platform.

2. Retail Direct Gilt Account (RDG) Application: After registration, proceed with the application for opening a retail direct gilt account (RDG).

3. Complete KYC: Furnish PAN, contact information, and bank details to complete the KYC process.

4. RDG Account Opening: Upon validation of provided information, an RDG account will be opened in the investor's name.

5. Email Confirmation: All details for participating in primary auctions and trading in the secondary market will be provided via email.

6. Nomination Details: Retail investors must fill in nomination details at the time of opening the RDG account.

The RBI retail direct platform has two segments—one for primary auctions and the other for secondary market trading via NDS-OM.

How to Buy Bonds via Stock Brokers/Stock Exchanges/Mutual Funds:

1. Registration and KYC: Register as an investor and complete the KYC process for bond investment.

2. NSE goBID and BSE Direct: For these stock exchanges, go through the KYC process and verify your Demat account. Existing investors with the exchanges may not need to repeat the KYC process.

3. Online Stockbroker: New investors can create accounts with online stockbrokers, enabling direct bond investments or indirect investments through mutual funds or ETFs.

Conclusion:

Investors seeking attractive returns with relatively lower risk than equities should consider venturing into bonds. With the emergence of numerous online bond platforms, the process has become more accessible. As a result, an increasing number of investors are entering the bond market. Exploring the various avenues detailed in this guide can empower investors to make informed decisions when venturing into the world of online bond investments.