Plan your investment
What Our Plans Cover
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Bonds issued by companies and fina...
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Fixed coupon payments at the state...
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Return of face value at maturity
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Holding in your demat account
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Secondary market sale before matur...
Who Can Consider This Plan?
- Indian resident individual, HUF, trust, firm or company
- NRIs, subject to the specific issue permitting NRI investment
- A demat account for holding the securities
- PAN and completed KYC
- Minimum investment as specified in the issue terms
What May Not Be Covered?
- Any government guarantee
- Deposit insurance of any kind
- Protection if the issuer defaults
- Protection against price falls before maturity
- Tax exemption — interest is taxable at slab rate
Always check the policy wording before you commit.
Why Choose Wealth & Covers?
- Expert advice to choose the right plan
- Plans from leading investments companies
- Hassle-free process and documentation
- End-to-end support, including claim assistance
- Dedicated relationship manager
- Expert Guidance Personalised advice from experienced investments professionals.
- End-to-End Support From choosing the right plan to claim assistance, we are with you always.
- Claims Assistance Hassle-free claim support to ensure you get what you deserve.
- Transparent Process Clear information, easy documentation and a hassle-free experience.
Overview
A corporate bond is debt issued by a company, paying a fixed coupon and repaying principal at maturity. It yields more than a government bond of the same maturity, and that spread is compensation for the possibility that the company does not pay.
Credit rating is the primary tool for assessing that possibility. AAA-rated issuers are considered very strong; the scale descends from there, and the yield rises as it does. A bond offering substantially more than the market is not a bargain that others have missed — it is a bond the market has priced for higher risk.
Both risks apply here. Credit risk determines whether you are repaid; rate risk determines what the bond is worth if you sell before maturity. A corporate bond carries both, which is why it yields more than a government bond and behaves less predictably than a deposit.
Who should consider it
Investors building a fixed income allocation who want more yield than government securities and can assess credit. Investors holding to maturity, where price movement matters less. Anyone spreading across several highly rated issuers rather than concentrating.
Benefits
- Higher yield than government bonds of the same maturity
- A defined coupon and maturity date
- Wide range of issuers, ratings and maturities
- Tradable on the exchange before maturity
- Access to established issuers at retail ticket sizes
- Useful for matching dated obligations at a better yield than sovereign debt
What is included, and what is not
Read the right-hand column first. It is the one that tends to surprise people later.
Included
- Bonds issued by companies and financial institutions
- Fixed coupon payments at the stated frequency
- Return of face value at maturity
- Holding in your demat account
- Secondary market sale before maturity
Not included
- Any government guarantee
- Deposit insurance of any kind
- Protection if the issuer defaults
- Protection against price falls before maturity
- Tax exemption — interest is taxable at slab rate
Terms vary between providers and between plans from the same provider. The offer document you receive is what governs — we will walk you through it before you commit.
How it works with us
- 1 We separate the two risks before anything else Credit risk is whether you get repaid. Rate risk is what the bond is worth if you sell early. Different risks, different answers.
- 2 Horizon matched to maturity A bond held to maturity behaves very differently from one sold in year two. That decision comes before choosing the issuer.
- 3 Rating and issuer examined properly A yield well above the market is telling you something. We read the rating rationale, not just the letter.
- 4 Purchase through the exchange or a registered platform Bonds settle into your demat account. We handle the mechanics and confirm what you actually bought.
- 5 Coupons tracked, maturity diarised Interest dates, reinvestment and redemption. Bonds are simple to hold and easy to forget about.
Important considerations
The things a brochure tends to leave out. Read these before you decide.
- Read the rating rationale, not just the letter. Agencies publish their reasoning, and it is more informative than the grade itself.
- A yield well above the market for a similar maturity is information about risk, not an opportunity others have overlooked.
- Spread across issuers. A single default in a concentrated fixed income portfolio does damage that the extra yield never compensated for.
- Check liquidity before assuming you can exit. Many corporate bond issues trade rarely, and selling before maturity can mean accepting a poor price.
- Ratings can be downgraded. A bond bought at AAA can be something else two years later, and the price will have moved before you notice.
Documents required
- PAN card
- Aadhaar or other identity proof
- Address proof
- Demat account details
- Bank account proof for coupon and redemption credit
- Completed KYC with the intermediary
Frequently Asked Questions
What does the credit rating actually tell me?
An agency's assessment of the issuer's ability to meet its obligations. AAA indicates the highest safety and the scale descends from there. The rating rationale published alongside is more useful than the letter, because it explains what the agency is actually worried about.
Why does one bond yield much more than another of the same maturity?
Because the market considers it riskier. Yield is compensation for credit risk, and a bond offering substantially above the market rate is priced that way for a reason. Treating an unusually high yield as an overlooked bargain is how investors lose principal in this asset class.
Can I sell before maturity?
On the exchange, subject to finding a buyer. Many corporate bond issues trade rarely, so exiting early can mean accepting a poor price or waiting. If you may need the money before maturity, that liquidity question matters more than the yield.
What happens if the issuer is downgraded?
The market price falls, usually before most investors notice. If you are holding to maturity and the issuer still pays, the downgrade costs you nothing directly. If you need to sell, it costs you real money.
How much should I put in a single issuer?
A modest portion of your fixed income allocation. The yield premium over government bonds is a few percentage points; a single default costs you principal. Spreading across several well-rated issuers is what makes that trade sensible.
Want a shortlist instead of a catalogue?
Tell us the situation and an advisor comes back with two or three options that actually fit — and names what each one gives up.