Bonds are also known as fixed income instruments. Governments or companies often utilize them to raise money by borrowing from investors. Bonds are typically issued to raise funds for specific projects. In return, the bond issuer promises to pay back the investment, with interest, over a certain period of time.
The different types of bonds available for investment in India are Central Government bonds, State Government bonds, Municipal and Local authority bonds, Corporate bonds, Public Sector bonds, and Tax free bonds. There are two types of bond markets – Primary and Secondary.
Bond investments can be done through your 3-in-1 account/ or Demat account online. Or you can invest in bonds indirectly by purchasing debt mutual funds that primarily invest in bonds. These can be found out by analyzing the portfolio of the respective mutual funds.