Bondbazaar Review: Is India’s Online Bond Platform Worth Your Money? A Complete Guide to High-Yield Bonds

India’s investment culture is evolving quickly.

While equity markets attract attention with high growth potential, not every investor is willing to stomach the volatility.

So where does one go for better-than-FD returns without going all-in on equities?

This is where high-yield corporate bonds enter the picture — and more importantly, where online bond platforms like Bondbazaar are reshaping the fixed-income landscape.

Just a few years ago, retail investors struggled with limited access, high minimum investment amounts, and a lack of transparent information.

Today, platforms like Bondbazaar promise to change that by offering:

• Easy access to corporate and government bonds
• Lower entry barriers
• Simplified research tools
• Digital, paperless transactions

But is Bondbazaar truly worth your time and money?

Let’s understand the basics before diving deeper into the review.

Table of Contents:

1. Understanding the Bond Market
2. What Exactly Is a Bond?
3. Government Bonds: The Safety Benchmark
4. Corporate Bonds: Higher Returns, Higher Research
5. Credit Ratings: What They Reveal and What They Don’t
6. India’s Top Credit Rating Agencies
7. Types of Bonds Based on Collateral
8. Bondbazaar Review: Platform Overview
9. Key Features of Bondbazaar
10. Product Offerings on Bondbazaar
11. Interest Pay-outs: What You Must Know
12. Minimum Ticket Size on Bondbazaar
13. Platform Features: Convenience Meets Caution
14. Who Should Consider Investing Through Bondbazaar?
15. Tax Implications: What You Should Know Before Investing
16. Comparisons with Equity: A Deeper Look at Risk
17. The Franklin Templeton Shock: When “Safe” Funds Went Silent
18. What Makes Credit Risk So Tricky?
19. Key Takeaways
20. Prefer Something More Transparent? Consider Alternatives
21. Conclusion: Why a CFP Can Help You Invest Smarter

1. Understanding the Bond Market

Have you ever lent money expecting it back with interest? That’s essentially what a bond is — but at an institutional scale.

Governments and corporations issue bonds to raise funds, promising periodic interest payments and repayment at maturity.

If bonds are so foundational to the economy, why do so few retail investors participate?

Because the bond market has traditionally been:

• Complex
• Opaque
• Accessible mostly to institutions or HNIs

Now, Bondbazaar aims to simplify this ecosystem for everyday investors.

2. What Exactly Is a Bond?

A bond is simply a loan you give to a company or government.

They repay you through interest (“coupon payments”) and return your principal at maturity.

But the real questions investors should ask include:

• What if the issuer defaults?
• How does interest rate movement impact bond prices?
• Am I allowed to sell the bond before maturity?
• What documents or checks should I review?

These fundamentals matter even more when evaluating platforms like Bondbazaar that list hundreds of bonds from different issuers.

3. Government Bonds: The Safety Benchmark

Government securities (G-Secs) are backed by the Government of India and are widely considered the safest fixed-income instruments available to retail investors.

But does maximum safety always guarantee maximum suitability?

It’s worth asking:

• Will G-Sec returns consistently beat inflation?
• Are they easy to liquidate when you need money urgently?
• Is the RBI Retail Direct platform beginner-friendly?
• Are there hidden costs or liquidity constraints you should know?

While the risk is minimal, G-Secs often come with longer maturities and modest returns — making them ideal for conservative investors who prioritize safety over yield.

Minimum Investment Requirement

• ₹1,000 (in multiples of ₹1,000)

Where Can You Buy Them?

• RBI Retail Direct Portal
• As well as platforms like Bondbazaar, which allow investors to explore and purchase government securities digitally.

4. Corporate Bonds: Higher Returns, Higher Research

Corporate bonds historically had high entry barriers, but SEBI’s decision to reduce minimum investments to ₹10,000 transformed the space.

Yet investors still need to consider:

• Should you focus only on AAA-rated bonds?
• Does a higher yield always indicate higher risk?
• How reliable is the issuer’s repayment history?
• Is the yield compensating adequately for default risk?

Platforms like Bondbazaar give retail investors access to these bonds — but the responsibility of evaluating risk still lies with the investor.

5. Credit Ratings: What They Reveal and What They Don’t

Would you lend your money to someone without knowing their repayment capacity? Probably not. That’s where credit ratings come in.

But how reliable are these ratings?

• Do agencies ever miss red flags?
• Have there been defaults even among high-rated instruments?
• Should a rating downgrade worry you?
• Can a single rating really capture the true financial health of a company?

While credit ratings are a useful starting point, they must be considered alongside other factors like cash flows and business fundamentals.

6. India’s Top Credit Rating Agencies

Here’s a quick list:

• CRISIL
• CARE Ratings
• ICRA
• SMERA
• Brickwork Ratings
• India Ratings & Research

Do all these agencies rate bonds the same way?

• How often do they update their ratings?
• Is there a possibility of conflict of interest since the issuer pays for the rating?

Each agency has its own evaluation methodology.

Since issuers pay for ratings, potential conflict of interest is always a conversation point.

It’s crucial to check ratings across agencies and stay updated, especially in volatile or uncertain markets.

Simplified Rating Scale:

Safety Level	CRISIL	CARE	ICRA
Highest Safety	CRISIL AAA	CARE AAA	ICRA AAA
High Safety	CRISIL AA	CARE AA	ICRA AA
Low Risk	CRISIL A	CARE A	ICRA A
Moderate Safety	CRISIL BBB	CARE BBB	ICRA BBB
Moderate Risk	CRISIL BB	CARE BB	ICRA BB
High Risk	CRISIL B	CARE B	ICRA B
Very High Risk	CRISIL C	CARE C	ICRA C
Default	CRISIL D	CARE D	ICRA D

7. Types of Bonds Based on Collateral

Is all debt created equal? Not quite.

Bonds vary widely in safety depending on what backs them. So, what should you look for as a retail investor?

• Senior Secured Bonds: Backed by collateral—your safest bet.
• Senior Unsecured Bonds: No collateral—more risk.
• Subordinated Bonds: Repaid only after senior bonds—higher risk.
• Perpetual Bonds: No maturity—most risky.

If the issuer goes bankrupt:

• Who gets paid first?
• Can you recover anything from a defaulted bond?
• Does the collateral truly offer protection in practical scenarios?

The type of bond matters significantly when it comes to capital protection.

Prioritising secured over unsecured debt is often a wise move for conservative investors.

8. Bondbazaar Review: Platform Overview

Bondbazaar is one of India’s dedicated fixed-income investment platforms, offering retail investors access to a wide range of bonds and yield-generating products.

It operates under SEBI’s Online Bond Platform Provider (OBPP) regulatory framework — an important step that aims to bring standardisation, transparency, and investor protection to the rapidly growing bond marketplace.

Minimum investment usually starts at:

• ₹100 for G-Secs
• ₹1,000 for Corporate Bonds

But what does SEBI-OBPP compliance actually mean for you?

• Does regulatory approval guarantee complete safety?
• Or does it simply ensure the platform follows SEBI’s compliance norms?
• How clearly does Bondbazaar communicate the risks?
• And can you rely solely on their filters and dashboards to select the right bonds?

These questions matter because regulation can reduce platform-level risks, but it cannot eliminate issuer-level credit risk.

Even highly rated issuers have defaulted in the past.

That’s why Bond bazaar’s compliance status should be seen as a safety layer—not a full safety guarantee.

Investors still need to exercise due diligence before committing capital.

9. Key Features of Bondbazaar

Bondbazaar offers a wide set of features that appeal to both beginners and experienced investors:

• Fully SEBI-OBPP Compliant: Operates under SEBI’s Online Bond Platform Provider framework, ensuring regulatory adherence.
• User-Friendly Interface: Offers real-time market data with a seamless, easy-to-navigate experience.
• Zero Brokerage & No Hidden Fees: No brokerage, account opening charges, or additional platform costs.
• Transparent Market Pricing: Bond prices are fully transparent as trading happens on NSE and BSE.
• Multi-Platform Access: Available via both mobile app and web-based trading interface.
• Attractive Fixed Returns: Offers bonds with returns typically ranging from 8% to 14%.
• Flexible Tenures: Investment durations range from 6 months to 5 years, catering to varied financial needs.

10. Product Offerings on Bondbazaar

The Bondbazaar platform provides access to a wide range of fixed-income products, including:

i. Sovereign Gold Bonds (SGBs)

Sovereign Gold Bonds are government-backed securities that serve as an alternative to holding physical gold.

Key features:

• Offer a fixed 2.5% annual interest
• Tax-free capital gains when held until maturity (8 years)
• Tradeable on stock exchanges, providing liquidity

ii. Corporate Bonds

Corporate bonds are SEBI-regulated fixed-income instruments issued by companies, state entities, NBFCs, or banks.

They are regulated by SEBI and suitable for investors looking to earn higher yields than government securities.

But caution is crucial—corporate bonds vary widely in safety based on rating, collateral, cash flows, and business strength.

They are typically used to raise capital for business expansion, operations, or refinancing existing debt.

iii. Government Securities (G-Secs)

Government securities are debt instruments issued by the central or state government to raise funds.

This category includes:

• G-Secs
• State Development Loans (SDLs)
• Treasury Bills (T-Bills)

These instruments are considered among the safest fixed-income options due to sovereign backing.

11. Interest Pay-outs: What You Must Know

Interest is typically paid monthly, quarterly, or semi-annually, depending on the bond.

But here are a few questions to consider:

• Are you missing out on the power of compounding by taking periodic payouts?
• Would manually reinvesting the interest help maximise returns?
• Could a growth option (like in mutual funds) be more tax-efficient?
• What happens if the issuing company runs into cash flow issues — will interest payments continue?

While fixed payouts offer regular income, they may not suit investors aiming for long-term compounded growth. Reinvestment discipline is key.

Periodic pay-outs help generate income, but they’re not ideal for long-term wealth creation unless you reinvest consistently.

12. Minimum Ticket Size on Bondbazaar

Bondbazaar offers small-ticket access, making bonds more accessible than ever.

📌 Minimum Investment Requirements

• Government Securities: Starts at ₹100
• Corporate Bonds: Starts at ₹1,000

However, the platform does not always provide extensive details about upcoming bond issuances or in-depth historical comparison data for existing bonds.

This may affect an investor’s ability to independently verify and compare opportunities.

Before investing, consider:

• Is this entry amount suitable for your financial stage?
• Should this come from your emergency fund? (Usually, no.)
• How much of your total portfolio should be allocated to such bonds?

Small-ticket access is a benefit — but only when aligned with your overall asset allocation.

13. Platform Features: Convenience Meets Caution

Bondbazaar offers a seamless investment experience:

✔ Simple KYC

Requires only PAN, Aadhaar, bank details, and a handwritten signature.

✔ Easy Order Placement

Choose a bond → click “Buy” → enter yield/price → confirm.
No clutter, no confusion.

✔ Assisted Bond Selling

Customer support helps investors liquidate their bond holdings.

But here’s the real question:

• Can the platform surface have hidden risks effectively?
• Does the clean interface make the underlying risks “feel” smaller than they actually are?
• Are you depending too much on platform filters without cross-checking with external sources?

Ease of use is helpful — but it cannot replace the need for personal research.

14. Who Should Consider Investing Through Bondbazaar?

High-yield bonds are not for everyone. Bondbazaar works best for the following investor profiles:

A. High-Risk Tolerance

You must be willing to accept the possibility of losing part—or even all—of your capital if the issuer defaults. These bonds compensate for higher risk with higher yields.

B. Longer Investment Horizon

A long-term outlook helps you ride out volatility and economic fluctuations. Staying invested until maturity improves the chances of recovering your principal (assuming no defaults).

C. Aim for Higher Income/Returns

These bonds offer substantially higher yields than government or investment-grade bonds, making them attractive to investors seeking enhanced income.

D. Need for Portfolio Diversification

High-yield bonds generally show low correlation with traditional fixed-income products. When allocated strategically, they can diversify a portfolio and potentially reduce overall volatility.

E. Informed & Active Investors

Ideal for those willing to:

• Analyse the issuer’s financial strength
• Understand governance and creditworthiness
• Monitor market conditions
• Or those who work with a qualified financial professional.

Before You Invest, Ask Yourself:

• Am I prepared to handle a potential default?
• Can I stay invested until maturity despite limited liquidity?
• What is my backup plan if the platform closes or ownership changes?
• Does this investment align with my long-term financial goals?

Bondbazaar is better suited for investors who have already secured their essential financial goals and are ready to take calculated risks for potentially higher returns through non-traditional debt products.

15. Tax Implications: What You Should Know Before Investing

When investing through platforms like Bondbazaar, taxes can significantly affect your final returns.

Here’s a clear breakdown:

Listed Bonds

• Holding ≤ 12 months: Short-term capital gains (STCG) taxed as per your income slab
• Holding > 12 months: Long-term capital gains (LTCG) taxed at 12.5% (without indexation)

Unlisted Bonds

• Holding ≤ 24 months: STCG taxed as per your income slab
• Holding > 24 months: LTCG taxed at 12.5% (without indexation)

Interest Income (Both Listed & Unlisted)

• Interest is taxable as “Income from Other Sources”
• TDS @ 10% is deducted by the issuer at the time of interest pay-out

Fixed Deposits (For comparison)

TDS @ 10% deducted at interest credit

TDS applies if interest exceeds ₹50,000 (₹1,00,000 for senior citizens)

Form 15G/15H can be submitted to avoid TDS if eligible

16. Comparisons with Equity: A Deeper Look at Risk

Equities—especially mutual funds—can be volatile.

We’ve all seen markets swing wildly, sometimes falling 40–50% during a crash. But here’s the thing: equity funds don’t “default and will not become zero.”

You don’t lose your capital unless you choose to exit at the wrong time. Historically, markets have recovered.

Patient investors often come out stronger on the other side.

Now contrast that with bonds.

What happens if the bond issuer fails to pay interest or return your capital at maturity?

That’s not just volatility—that’s a default, and it can mean permanent loss. And we’ve seen this before:

• DHFL (2019): Over ₹1,500 crore defaulted—both interest and principal.
• IL&FS (2018): A massive ₹91,000 crore default that shook the financial system.
• YES Bank AT1 Bonds: Retail investors lost everything—100% write-off.

So, are bonds “less risky” just because they’re not stocks? Not quite.

Even senior secured bonds carry credit risk.

While they’re typically backed by collateral, it’s not a guarantee against loss.

What if the collateral drops in value? What if recovery takes years—or doesn’t happen at all?

Meanwhile, equity mutual funds bring other strengths to the table: diversification, liquidity, and professional management.

And when viewed over the long term, their risk-adjusted returns—especially from large-cap or hybrid funds—can be surprisingly strong.

The bottom line

Bonds may feel “safe” because they’re stable on the surface, but they carry their own kind of risk—just in a different form.

So instead of asking, “Which one is safer?” maybe ask:

• “Can I handle the ups and downs of equity?”
• “Am I prepared for illiquidity or a default in bonds?”
• “Does my portfolio balance growth with safety?”

There’s no one-size-fits-all answer. The key is to match your investments to your temperament, time horizon, and financial goals.

Because at the end of the day, smart investing isn’t about picking sides. It’s about knowing your risk—and owning it.

17. The Franklin Templeton Shock: When “Safe” Funds Went Silent

Let’s rewind to April 2020.

Franklin Templeton—one of India’s most trusted fund houses—abruptly shut down six debt mutual funds. Just like that, over ₹25,000 crores of investor money were frozen.

And here’s the twist:
These weren’t underperforming funds.
They had consistently outperformed fixed deposits for years.

For many investors, it felt like the perfect balance of returns and stability.

Until they weren’t.

The pandemic triggered panic redemptions. The bond market froze.

There were no buyers for the low-rated, illiquid bonds Franklin had loaded up on.

And suddenly, investors were locked out of their own money for months.

The funds hadn’t “failed” on paper. But the structure collapsed under stress.

Eventually, most investors got their capital back.
But the lesson was loud and clear:

“Strong past performance isn’t protection against a weak portfolio underneath.”

“History Doesn’t Repeat, But It Often Rhymes”

Now pause for a second.

If a reputed AMC like Franklin Templeton—with seasoned fund managers, SEBI oversight, and daily NAV disclosures—could end up freezing investor money…

…what about platforms offering unlisted bonds from lesser-known issuers?

No regulatory NAV.
No secondary market liquidity.
No guarantee of principal.
And no historical data that’s been tested in a true credit crisis.

We’re not saying Bondbazaar or similar platforms are scams. Far from it.

But ask yourself—

• Do you really know what’s backing that “9.5% fixed return”?
• What if the underlying NBFC hits a cash crunch?
• Who steps in to protect you then?

Even Franklin’s investors had to wait months.

Here, the risks are higher, and the safety net thinner.

18. What Makes Credit Risk So Tricky?

Credit events are like earthquakes. You never know when one will strike.

Everything looks fine—until one default starts a domino effect.

A single default can trigger:

• Rating downgrades
• Collateral issues
• Delayed recovery
• Loss of principal

This is why high-yield bonds bought through Bondbazaar should never be treated like alternatives to FDs.

They are completely different products.

That’s why smart investors look beyond flashy returns and ask:

“Can this portfolio withstand a crisis?”

In that sense, products like these aren’t “alternative FDs.”

They’re more like FD lookalikes—wearing a suit, carrying a risk you can’t see.

19. Key Takeaways

• High-yield bonds may offer better returns than traditional fixed-income options, but they also carry significant risks and are not suitable for every investor.
• Always examine factors such as issuer creditworthiness, interest-rate trends, economic conditions, and—most importantly—your own risk tolerance.
• Assess whether the bond’s features align with your financial goals, investment horizon, and comfort with potential defaults.
• Remember, the bond market is less liquid—you might struggle to find buyers when you need to exit.
• Strong branding or past performance does not eliminate the inherent credit risk of unlisted or lesser-known bonds.
• Careful risk evaluation and a strategic allocation approach are critical for protecting your capital.

20. Prefer Something More Transparent? Consider Alternatives

SEBI-regulated credit risk mutual funds offer:

• Instant diversification
• Daily NAVs with complete transparency
• Professional fund management
• Better liquidity compared to individual bonds

If you want sovereign-level safety with zero fees, explore RBI Retail Direct, a direct platform for investing in G-Secs.

21. Conclusion: Why a CFP Can Help You Invest Smarter

While platforms like Bondbazaar offer convenience and the possibility of higher yields, they also come with notable risks—ranging from limited liquidity to issuer-specific credit exposure. These instruments require careful evaluation and should not be chosen solely based on attractive returns or platform convenience.

A Certified Financial Planner (CFP) can play a crucial role here.

They can help you:

• Build a well-diversified portfolio aligned with your life goals, risk tolerance, and investment horizon.
• Evaluate whether high-yield bonds genuinely fit into your financial strategy.
• Assess the creditworthiness, liquidity, and suitability of various bond products.
• Avoid concentration risks by recommending the right allocation across debt, equity, and other asset classes.

Professional guidance ensures that you don’t just seek returns—you make informed, goal-aligned decisions that strengthen your long-term financial well-being.