For a long time, bonds felt like something only institutions, high net-worth individuals (HNIs) or very serious investors bothered about. That is slowly changing. With more people reading up on money and more apps making financial products “one tap away”, bonds are starting to look like a middle path between low-return fixed deposits and bumpy equity markets.
There is another layer to this story. As interest grows, the market has also seen a rise in online platforms offering bond investments. That is exactly why the capital markets regulator has stepped in and asked investors to stay away from unregistered bond platforms that sell products without proper approvals. So, the opportunity is real, but so is the need for caution.
Three broad reasons seem to be driving the bond buzz among retail investors:
First, many people now want steady, predictable cash flow. Job changes, gig work, variable bonuses and rising living costs mean a fixed, visible income stream feels reassuring. Certain bonds, especially those paying regular interest, can support that.
Second, yields have become more attractive. In many cases, good-quality corporate and government bonds are offering around 7–9%, while some higher-risk bonds can go up to 10–12%. Traditional fixed deposits are still hovering around 5–6% for many savers. That gap naturally pulls attention towards bonds.
Third, digital access has changed the game. Earlier, bonds felt complex and hard to access. Now, app-based platforms show ratings, yields and maturities in a way that feels similar to shopping for any other product online. For younger and tech-savvy investors, that lowers the psychological entry barrier.
On top of that, bonds tend to be less volatile than equities, provide more predictable cash flows, and may offer tax advantages in certain structures. All of this makes them attractive to conservative investors and retirees who want stability without parking everything in savings accounts or FDs.
Most popular platforms focus on: Listed corporate bonds, often from financial companies, Government securities (G-secs) of various maturities, and PSU bonds, some of which pay tax-free interest.
Returns vary widely based on the credit rating of the issuer. As a rough pattern:
Highly rated bonds (towards the AAA end of the scale) usually offer lower but safer yields, say around 6–7%
Lower down the rating ladder (like BBB+), yields can shoot up to 13–14.5%
At the very bottom, where ratings are weak or missing altogether, the risk of default can be extremely high. Many serious platforms avoid such issues because a single large default can badly damage trust.
Government securities often sit in the 6–7.5% bracket, while some PSU bonds still offer 5.5–6.5% tax-free interest, which can be attractive on a post-tax basis for investors in higher slabs.
Yield To Maturity (YTM), coupons and “too good to be true” returns. YTM is the total return you are expected to earn from a bond if you hold it until it matures.
Because bonds are regulated products, the way returns are shown is not completely random. One key concept you will often see is YTM – yield to maturity. Think of it as a more complete version of “interest rate”, which factors in both the coupon (interest paid) and the price you pay for the bond.
When scrolling through apps, three numbers matter a lot:
Credit rating of the issuer
Coupon rate (the interest the bond promises to pay)
Yield to maturity (YTM)
Yields in the 7–9% range for good-quality issuers can be normal, depending on market conditions
Yields above 12% should automatically trigger questions in your mind
Very high promised returns often mean one of two things: either the risk is significantly higher, or something about the way the return is being communicated is not fully transparent. In both cases, it demands extra homework from the investor.
If an app is casually showing 20–25% type returns on a bond, that is a loud warning signal. Strong, established borrowers usually do not need to raise money at such expensive rates. If they are paying that much, you have to ask why.
Behind the scenes, there is a regulatory framework that decides who is allowed to run a bond platform and how they must operate. A serious bond platform is expected to have registrations such as:
(i) Online Bond Platform Provider (OBPP)
(ii) Stockbroker registration
(iii) Registered investment adviser registration in some cases
These registrations are not just paperwork. They ensure that:
(i) Transactions pass through regulated market infrastructure
(ii) Investor assets are better protected even if the platform itself closes down
(iii) There are checks on how products are sold and how returns are communicated
When platforms operate outside this framework, investors are exposed to higher risk of mis-selling, poor execution, and weaker recourse if something goes wrong.
(i) Even if you are not new to bonds, a few basic filters can protect you from many problems. Some key red flags:
(ii) Abnormally high promised returns with no clear explanation of risk or rating
(iii) Missing or vague information on the issuer, credit rating, and repayment history
(iv) No mention of SEBI or exchange registration for the platform
(v) Weak or non-existent KYC processes, which suggest poor compliance
(vi) No clear grievance redressal mechanism or contact path in case of disputes
(vii) Phrases like “guaranteed” high returns that are far above what similar-rated bonds offer in the regular market
(viii) Hidden fees, unclear settlement rules, or platforms that make it hard to understand how and when you will get your money back
If even one of these shows up, it is worth slowing down and double-checking before investing. If several show up together, walking away is often the safer choice.