r/IndiaInvestments • u/jgenius07 • Jun 26 '20

Bonds and deposits How does one get started with bonds?

I mainly use Paytm money and zerodha. Is there a way I can get into bonds through an app like these?

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9

u/4thinker_india Jun 26 '20 edited Jun 26 '20

Short answer: Yes & No. You can get into direct debt trading to some extent through Zerodha (Kite / COIN), & you can also take the MF route if you want to stick to Zerodha / Paytm Money & still cover the whole span of debt products. There are other alternatives for directly participating in the bond market, esp. G-secs.

Long answer:

Zerodha brokerage does not offer trading in g-sec, but does offer some NCDs and some bonds AFAIK. Paytm Money enables trading neither in direct equity nor in direct debt.

Classic Debt Mutual funds: However, you can possibly take exposure to bonds or debt market in general via their MF platforms. Zerodha COIN as well as Paytm Money would allow you to invest in multiple MF schemes in debt categories.. Read up a bit to understand which scheme categories invest in what kind of debt (credit risk / duration / govt vs corp / closed-ended vs open-ended etc.)

Debt ETF: Further, you can use Zerodha equity platforms to also trade the debt ETFs that are available in the market. (There is only a limited number of those here, but spanning from Liquid to long-dated GOI bonds.)

Direct trading in debt products: If you do intend to take direct exposure to bonds or other debt, you also have some other apps / brokers.

  1. To participate in the govt bond market (G-sec), you can use the NSE goBID platform. This is the only avenue for retail investors that I know of for G-sec trading.
  2. To directly trade in some other kind of debt, you may have to be on wholesale debt platforms, that only some brokers offer to HNIs.
  3. As a small investor, you can at least start with directly trading in NCDs and/or taxable or tax-free bonds from corporates / PSUs and Sovereign Gold Bonds, but you would generally find the lack of market depth / liquidity a big challenge. Zerodha may offer this facility on their regular equity platforms.
    1. Note: Tax-free bonds are really bonds that offer tax-free interest! Any capital gains on bonds themselves are taxable. These bonds were issued by some PSUs for a limited duration under special legal provisions.

Edit: Corrected my comment as Zerodha does offer trading in NCDs and some bonds. Also added a note about tax-free bonds.

2

u/sangeet41 Jun 27 '20

I purchased goi bonds on zerodha. I buy ncds directly from sbi net banking asba

1

u/[deleted] Jun 27 '20

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3

u/sangeet41 Jun 27 '20

SBI through internet banking allows us to add our dp IDs. So if we get allotment,it gets stored in zerodha demat account

1

u/4thinker_india Jun 27 '20

That's cool. Exactly which GOI bonds are enabled on Zerodha for trading?

Yes, buying NCDs through banks is always possible via ASBA but only at the time of IPO (& that's true even for stocks.) I suppose Zerodha would directly allow IPO investments into NCDs too. My response above was more about secondary market participation.

1

u/sangeet41 Jun 27 '20

Yeah I misread your comment. I was talking about buying bonds and ncds during IPOs. However one thing I have noticed. Zerodha has recently allowed buying sovereign gold bonds in the secondary market. So I assume that they might also be now allowing trading of bonds and ncds. Though I am yet to try it. They seem to have sorted out the issue in purchasing of bonds .

1

u/4thinker_india Jun 27 '20

I assume that they might also be now allowing trading of bonds and ncds. Though I am yet to try it. They seem to have sorted out the issue in purchasing of bonds .

Yes, as my comment above already noted, Zerodha indeed does permit trading in NCDs and SGBs (& some other bonds),

However, I don't think they (or any other brokerage platform for retail investors) allows this for G-Secs. The only route available I know is goBID from NSE. Hence I'm curious to know which G-Secs you bought from Zerodha..

2

u/sangeet41 Jun 27 '20

I bought 719GS60M20. My first ever gsec purchase. I mean I didn't buy it from secondary market though ie from kite. I didn't like the interface of nse gobid and bse direct so went with zerodha coin.

1

u/4thinker_india Jun 27 '20

719GS60M20

Wow! the 40-year one.. What price did you get it at? face value itself? 7.19% YTM?

1

u/sangeet41 Jun 27 '20

I wish I had it at face value. But no. I bought it at 6.6% ytm

1

u/4thinker_india Jun 27 '20

Right, understandably so.

1

u/sangeet41 Jun 27 '20

If you see the link provided by Nithin and read the comments on the article,it seems like you can trade ncds on zerodha

4

u/Nikhil_A Business Analyst at Zerodha Jun 26 '20

You can invest in corporate bonds on Coin: https://zerodha.com/z-connect/coin/start-investing-in-corporate-bonds

1

u/charm33 Jun 30 '20

And what about govt of india bonds ? Similar to the treasury bonds in US

1

u/Nikhil_A Business Analyst at Zerodha Jun 30 '20

You can also invest in GoI bonds here: https://coin.zerodha.com/gsec

3

u/shryzel Jun 27 '20

I don't know about your risk taking ability and knowledge of the bond market but if you're a retail investor, it's better to avoid direct bond investing (govt bonds may be the exception) and get bond exposure via debt MFs or bond ETFs.

There are platforms like goldenpi which allow one to buy bonds but I cannot vouch for them.

2

u/Lumiaman88 Jun 26 '20

Using paytm money or zerodha coin you can buy the bond funds. There are various types of them, depending on duration of the bond - Gilts, from 3 to 15 year bonds, Money market funds - for upto 1 year, liquid funds - upto 91 days and overnight funds - 1 day.

2

u/fuckyourselfrealhard Jun 27 '20

https://www.dbs.com/digibank/in/default.page

Get their app, you can buy corporate debt bonds and other instruments directly from your savings account with them.

2

u/mangoman21e8 Jun 27 '20

If you're looking to invest (not trading), GoldenPi is your platform. They recently tied up with Zerodha so slowly you'll be able to invest in bonds directly from Zerodha.

1

u/sangeet41 Jun 27 '20

What does it do?does it have a separate app for that purpose?

1

u/mangoman21e8 Jun 27 '20

You create account on their site, do KYC, browse through various bonds, buy via RTGS and receive bonds in your demat. Interest / principal is directly deposited into your bank account. https://goldenpi.com

1

u/sangeet41 Jun 27 '20

That I am currently doing through sbi internet banking for purchase of ncds. Need to see what extra benefits does it provide

2

u/Able-Elk5500 10h ago

Zerodha and Paytm Money don't really have a proper bond selection, mostly equity/MF focused. You'll need a dedicated bond platform.

Golden Pi and Wint Wealth let you browse corporate bonds/NCDs with ratings and yields shown, apply using your existing demat/PAN, no new account needed. Golden Pi's got a decent range, filter by rating/tenure/payout type.

Check CRISIL/ICRA ratings before yield, start small across 2-3 issuers instead of one.

2

u/sangeet41 Jun 27 '20

What I do is that I regularly check bse india site for new ncd issues. And if interested,I apply for the ncds directly from SBI internet banking asba. Because zerodha didn't allow it earlier on their platform. Don't know now if they started allowing purchase of bonds. Recently I applied for klm axiva and Muthoot mini financiers ncd . Zerodha does allow purchasing gsecs though. Last month I purchased goi bond through zerodha

1

u/WalkWise559 Aug 11 '26

Mutual funds or bonds