Learning Center

Everything you need to know about bond investing. From basics to advanced concepts, we've got you covered.

What are Bonds?
Key Terms
Risk Guide
FAQs

What are Bonds?

A bond is essentially a loan you make to a company or government. When you buy a bond, you're lending money to the issuer in exchange for regular interest payments (called coupons) and the return of your principal (face value) when the bond matures.

Unlike stocks, where you own a piece of the company, bonds make you a creditor. This means bondholders have a higher claim on assets than shareholders if the company faces financial difficulties.

Key Characteristics:

  • Face Value: The amount you'll receive at maturity (typically ₹1,000 per bond)
  • Coupon Rate: The annual interest rate paid on the face value
  • Maturity Date: When the principal is repaid
  • Credit Rating: An assessment of the issuer's creditworthiness
Example: How a Bond Works

Bond Details:

  • Face Value: ₹1,000
  • Coupon Rate: 9% per annum
  • Payment: Semi-annual
  • Maturity: 3 years
Investment:₹1,000
Coupon Payment (every 6 months):+₹45
Total Coupon over 3 years (6 payments):+₹270
Principal at Maturity:₹1,000
Total Return:₹1,270

Key Terms Glossary

YTM (Yield to Maturity)

The total return expected on a bond if held until it matures, expressed as an annual percentage. It accounts for coupon payments and any gain/loss from price difference.

Coupon Rate

The annual interest rate paid on the bond's face value. A bond with ₹1,000 face value and 8% coupon pays ₹80 per year.

Face Value (Par Value)

The amount the bondholder receives when the bond matures. Corporate bonds in India typically have a face value of ₹1,000.

ISIN

International Securities Identification Number - a unique 12-character alphanumeric code that identifies a specific security.

Credit Rating

An assessment by rating agencies (CRISIL, ICRA, CARE) of the issuer's ability to repay. AAA is highest, D is default.

Secured vs Unsecured

Secured bonds are backed by specific assets (collateral). Unsecured bonds rely only on the issuer's creditworthiness.

Demat Account

A dematerialized account that holds securities in electronic form. Required to buy and hold bonds in India.

Settlement

The process of transferring securities from seller to buyer and payment from buyer to seller. Typically T+1 or T+2 days.

Accrued Interest

Interest that has accumulated since the last coupon payment. When you buy a bond, you pay the price plus accrued interest.

Understanding Credit Ratings & Risk

RatingRisk LevelDescriptionTypical YTM
AAAVery LowHighest credit quality. Extremely strong capacity to meet financial commitments.7-8%
AALowVery high credit quality. Very strong capacity to meet financial commitments.8-9%
AMedium-LowHigh credit quality. Strong capacity, but somewhat susceptible to adverse conditions.9-10%
BBBMediumGood credit quality. Adequate capacity, more vulnerable to changing conditions.10-11%
BB & BelowHighSpeculative grade. Elevated vulnerability to default risk.11%+
Types of Risk in Bond Investing

Credit Risk (Default Risk)

The risk that the issuer fails to make coupon payments or repay principal. Mitigated by choosing higher-rated bonds.

Interest Rate Risk

When interest rates rise, bond prices fall (and vice versa). Less relevant if you hold bonds to maturity.

Liquidity Risk

The risk of not being able to sell a bond quickly at a fair price. Corporate bonds are less liquid than government bonds.

Inflation Risk

The risk that inflation erodes the purchasing power of your returns. Consider real (inflation-adjusted) returns.

How to Invest on Post9

1

Browse & Select

Explore our curated bond marketplace. Filter by rating, yield, maturity, and more to find bonds that match your goals.

2

Create Account

Sign up with your phone number. Quick OTP verification gets you started in minutes.

3

Complete KYC

Add your PAN and demat account details. This is required for regulatory compliance and bond settlement.

4

Place Order

Select quantity and confirm your order. Our team will call to verify details and guide you through payment.

5

Make Payment

Transfer funds via NEFT/IMPS/UPI to complete your investment. We'll confirm receipt and proceed.

6

Receive Bonds

Bonds are credited directly to your demat account. Track everything in your dashboard.

What You'll Need
Documents required for investing

  • PAN Card

    For identity verification and tax purposes

  • Demat Account

    With CDSL or NSDL depository

  • Bank Account

    For making payments

  • Phone Number

    For OTP verification and communication

Frequently Asked Questions

Ready to Start Your Bond Investment Journey?

Browse our curated selection of high-quality bonds and start earning stable returns.