BondsIndia Review: Is This Online Bond Platform Worth It?

Have you ever chased higher returns thinking they’d get you to your financial goals faster?

You’re not alone. Many investors operate under the “more is better” mind-set — without fully considering the risk that comes with it. The reality? Higher returns often walk hand-in-hand with higher risk.

In recent years, more and more investors have been looking for options that outperform fixed deposits (FDs) without sacrificing safety.

That’s where new-age platforms like BondsIndia are stepping in, offering high-yield bonds that aim to strike the right balance between return and risk.

But is it as simple as it sounds? Let’s dive in.

Table of Contents

1. Understanding the Bond Market
2. What Is a Bond?
3. Government Bonds
4. Private/Corporate Bonds
5. Importance of Credit Ratings
6. Top Credit Rating Agencies in India
7. Types of Bonds Based on Collateral
8. BondsIndia: Platform Overview
9. Product Offerings on BondsIndia
10. Interest Pay-out
11. Minimum Ticket Size: Low Entry Barrier, But Think Twice
12. Platform Features: Smooth Experience, But Look Deeper
13. Suitability
14. Taxation
15. Comparisons with Equity: A Deeper Look at Risk
16. The Franklin Templeton Shock: When “Safe” Funds Went Silent
17. “History Doesn’t Repeat, But It Often Rhymes”
18. TruCap Bonds: A Cautionary Tale for Retail Investors
19. What Makes Credit Risk So Tricky?
20. Key Takeaways
21. Conclusion: Why a CFP Can Help You Invest Smarter

1. Understanding the Bond Market

Have you ever lent money to a friend, expecting them to pay you back with a little extra for your trouble?

That’s essentially what a bond is — only here, the borrower could be the government or a large corporation, and the “extra” is the interest you earn.

Bonds allow entities to borrow money from the public, promising to return the principal plus periodic interest.

But if bonds are such a fundamental part of the economy, why aren’t they a household investment choice in India?

The truth is, the bond market is often called the ‘backbone of the economy’, yet retail participation remains low. Why?

• Limited awareness
• Perceived complexity
• Lack of user-friendly access

This is exactly where platforms like BondsIndia come in — aiming to make bond investing as simple as buying a mutual fund or a stock.

2. What Is a Bond?

At its simplest, a bond is a loan you give to an entity, whether that’s the government or a private company.

In exchange, they agree to pay you interest at fixed intervals and return the principal on maturity.

Sounds easy enough, right? But here’s where the real questions begin:

• What if the borrower defaults?
• How do changing interest rates affect the value of your bond?
• Can you sell your bond before maturity, and if so, will you get a fair price?

These aren’t just academic concerns — they can directly impact your returns and liquidity.

That’s why reading the fine print, understanding credit ratings, and knowing your exit options are critical before investing.

3. Government Bonds

Think of government bonds — or G-Secs — as the gold standard of fixed-income investments in India.

Issued by the Government of India, they’re about as safe as you can get in the debt market.

But does safe always mean best? Let’s think about it:

• Can G-Secs always beat inflation?
• How quickly can you liquidate them if you need urgent cash?
• Is the RBI Retail Direct portal as easy to use as promised?
• Are there any charges that could quietly eat into your returns?

While G-Secs offer unparalleled safety, they can fall short on liquidity and may offer modest returns compared to riskier debt instruments.

They’re a good fit for conservative investors who value stability over aggressive growth.

Quick Facts:

• Minimum Investment: ₹1,000 (in multiples of ₹1,000)
• Where to Buy: RBI Retail Direct portal

4. Private/Corporate Bonds

Why did corporate bonds remain out of reach for so long? The answer is simple — high entry barriers.

For years, only large investors could participate.

But with SEBI’s recent move to reduce the minimum investment to ₹10,000, the gates have finally opened for retail investors.

Sounds exciting, right? But before you dive in, some important questions need answers:

• How do you decide which corporate bond truly deserves your trust?
• Should you stick to the comfort zone of AAA-rated ones?
• Do higher yields always come hand-in-hand with higher risk?
• And how exactly can you dig into a company’s fundamentals or track record of debt repayments?

The bottom line: corporate bonds can offer attractive yields, but they demand careful research and a healthy respect for risk.

5. Importance of Credit Ratings

Would you lend money to someone without knowing if they can pay it back? Probably not.

That’s exactly why credit ratings exist — they give you an idea of an issuer’s repayment ability.

But here’s the tricky part:

• Can ratings ever miss warning signs?
• Have there been cases where even top-rated instruments defaulted?
• Should you worry if a rating is suddenly downgraded?
• And can a single rating really capture the full financial health of a company?

While credit ratings are a great starting point, they should never be the only thing you rely on.

Always pair them with your own checks on cash flows, debt levels, and business stability.

6. Top Credit Rating Agencies in India

Here’s a quick list of the big names:

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

But do all these agencies use the exact same yardstick?

• How often do they update their ratings?
• And is there ever a risk of conflict of interest, considering the issuer pays for the rating?

Smart investors compare ratings across multiple agencies — especially when the market is shaky.

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? Definitely not.

Bonds vary in safety depending on what backs them — and as a retail investor, this is worth paying close attention to.

• Senior Secured Bonds: Backed by collateral — your safest bet.
• Senior Unsecured Bonds: No collateral — higher risk.
• Subordinated Bonds: Repaid only after senior bonds — even higher risk.
• Perpetual Bonds: No maturity date — the riskiest of the lot.

If the issuer goes bankrupt:

• Who gets paid first?
• Will you recover anything from a defaulted bond?
• And in the real world, does collateral actually protect your capital?

For most conservative investors, secured debt should be a top priority.

8. BondsIndia: Platform Overview

BondsIndia is an online platform designed to make investing in fixed-income securities simpler.

Operated by Launchpad Fintech Private Limited, it acts as a digital marketplace for buying and selling bonds.

Sounds like a one-stop shop, but let’s pause for a reality check:

• Does using the platform guarantee zero risk?
• Is regulatory oversight the same as a safety guarantee?
• How transparent is it about the risks involved?
• And should you rely only on its built-in filters to make decisions?

The truth: while the regulatory framework helps prevent fraud, it cannot eliminate the possibility of default. Your own due diligence is non-negotiable.

9. Product Offerings on BondsIndia

1. Bonds

A wide selection of bonds, with filters for coupon rate, tenure, credit rating, and face value — making it easier to match investments with your goals.

2. Initial Public Offerings (IPOs)

Details of current and upcoming bond IPOs, including:

• Issuer name
• Issue size
• Credit rating
• Subscription stats (total and pending)
• Opening and closing dates

3. G-SEC STRIPS

Stripped securities from Government of India bonds or treasury notes. You can trade the interest and principal separately as zero-coupon bonds.

💡 Knowledge Tip: “Stripping” means breaking down a coupon-bearing bond into individual interest (coupon) and principal parts.

For example, a 10-year bond with semi-annual coupons can be stripped into 20 coupon instruments and one principal instrument.

4. 54EC Bonds

For those who have sold immovable property and want to save on long-term capital gains tax. Conditions:

• Invest within six months of sale.
• Max limit: ₹50 lakhs per individual.

5. Fixed Deposits

Corporate FDs from reputed issuers like;

• LIC Housing Finance
• Kotak Mahindra Bank
• Shriram, HDFC Bank
• PNB Housing
• ICICI Home Finance
• Axis Bank
• Citibank

These are for investors seeking predictable returns with relatively low risk.

10. Interest Pay-out

Interest on bonds and other fixed-income products can be paid monthly, quarterly, or semi-annually—depending on the issuer’s terms.

But before locking in a pay-out frequency, it’s worth asking yourself:

• Are you missing out on the power of compounding? Regular pay-outs may feel good, but since the interest isn’t automatically reinvested, your returns might grow slower.
• Will you manually reinvest the pay-outs? Without reinvestment, your money could lose out to inflation.
• Would a growth-oriented option be better? In some cases—like debt mutual funds—reinvesting interest could be more tax-efficient.
• What if the issuer faces cash flow problems? Can interest payments be delayed or skipped entirely? (Yes—if the issuer’s finances take a hit.)

Fixed interest pay-outs are great for steady income seekers—such as retirees or those funding regular expenses. But for long-term wealth builders, a reinvestment strategy can make all the difference.

11. Minimum Ticket Size: Low Entry Barrier, But Think Twice

With a starting investment as low as ₹10,000, BondsIndia opens the door for many first-time bond investors.

But here’s the golden rule: accessibility ≠ suitability.

Before you dive in, think about:

• Portfolio allocation: What percentage of your total investments should be in these bonds?
• Emergency funds: Is this the right place to park your rainy-day money? (Probably not—liquidity is key here.)

The low entry point is attractive, but these products work best when they fit into a well-planned asset allocation strategy—not as a replacement for core, safe assets.

12. Platform Features: Smooth Experience, But Look Deeper

BondsIndia markets itself as a next-gen online bond platform, boasting:

• Quick KYC completion
• Multiple product choices
• Payment in just a few clicks
• “Invest in just 7 minutes” promise

It’s undeniably convenient. But remember:

• Does ease of use make you overlook deeper due diligence?
• Are you relying solely on filters without understanding the underlying risks?
• Could simplicity make you underestimate the complexity of debt products?

Bottom line: The platform is a great tool—but tools don’t replace research.

13. Suitability: Is BondsIndia Right for You?

This platform is designed for investors willing to take on higher risk in search of better returns than traditional fixed deposits or government bonds.

It may suit:

• Aggressive savers aiming for above-average fixed-income returns
• Investors adding a high-risk debt component to diversify their portfolio
• People with surplus funds after meeting their primary goals

But before investing, ask:

• Can you handle the risk of default?
• Can you stay invested until maturity despite low liquidity?
• What’s your backup plan if the platform shuts down?
• Does this product fit into your financial plan—or is it just chasing yield?

Pro tip: Allocate here only after securing your emergency corpus and core investments.

14. Taxation: How Your Bond Earnings Are Taxed

Investors earn in two ways—interest income and capital gains—both of which are taxable.

Interest Income

The interest earned from bonds is added to your Gross Total Income (GTI) and taxed as per your individual income tax slab rate.

Capital Gains

Capital gains arise when you sell the bond for more than its purchase price. These gains are classified based on the type of bond and holding period:

For Listed Bonds:

• Held for more than 12 months:Taxed as Long-Term Capital Gains (LTCG) at 10% (without indexation).
• Held for 12 months or less:Treated as Short-Term Capital Gains (STCG) and taxed at your slab rate.

For Unlisted Bonds:

• Held for more than 36 months:Taxed as LTCG at 20% (without indexation).
• Held for 36 months or less:Treated as STCG and taxed according to your income tax slab.

15. Comparisons with Equity: A Deeper Look at Risk

The online bond platforms say their bonds offer “higher returns than FDs and are less risky than equity.” Sounds promising, right?

But let’s pause for a moment—what does “less risky” really mean?

Yes, 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.

16. 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, they 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.”

17. “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 BondsIndia 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. TruCap Bonds: A Cautionary Tale for Retail Investors

TruCap Finance Ltd, a Non-Banking Financial Company (NBFC), raised funds by issuing Non-Convertible Debentures (NCDs) to the public.

These funds were used primarily for lending to small businesses and providing gold loans.

While TruCap boldly advertised attractive coupon rates (13%+), the associated risks were often buried in the fine print—a red flag for vigilant investors.

The Problem with Chasing High Returns

Many investors are drawn in by the notion that “higher interest is always better.”

However, in the world of bonds, returns are directly proportional to risk. TruCap is a prime example of how this can go wrong.

What Went Wrong?

TruCap Finance attracted investors with the promise of high returns—over 13%—through bonds backed by small business and gold loans. But behind the glossy pitch, its financial foundation was weak.

As loan defaults rose, its credit rating was sharply downgraded, triggering early repayment clauses.

But TruCap didn’t have enough liquidity to pay investors back.

In desperation, it turned to the Marwadi Chandarana Group for a ₹100 crore bailout, expecting part of the funds by mid-June.

But delays in the fund infusion, along with slower-than-expected loan collections, left the company unable to meet its obligations.

On July 16, 2025, TruCap defaulted.

A few days later, CARE Ratings downgraded its bonds—turning a high-yield promise into a painful lesson for retail investors.

Rating Downgrade and Default

On July 18, 2025, CARE Ratings (CareEdge) downgraded TruCap’s ratings, citing its inability to meet principal and interest payments on NCDs due on July 16, 2025.

CARE Report Excerpt (July 18, 2025): CLICK HERE FOR CARE REPORT

As of May 31, 2025, TruCap faced ₹103 crore in debt repayments over the next three months, while holding only ₹57 crore in unencumbered cash.

Expected inflows:

• ₹92 crores in collections
• ₹10 crores from existing promoters
• ₹100 crores from MCG (₹50 crores by June 15, 2025, balance by July)

Despite these expectations, timely liquidity was not ensured, leading to default.

Lessons from the TruCap Story

• A promised high return is often a signal to look deeper into the issuer’s financials.
• Credit downgrades can accelerate repayment obligations, catching both the issuer and investors off guard.
• Glossy platforms and simplified apps can make risky instruments seem safe to unsuspecting retail investors.
• Retail investors should be wary of NBFCs with weak financial profiles, even if they are offering higher returns.

19. 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.

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.

20. Key Takeaways

• SEBI registration ≠ guaranteed safety: Bond platforms like BondsIndia are SEBI-registered as intermediaries—not as guarantors of safe or high-return products.
• Defaults are real and not rare: Cases like DHFL, IL&FS, Yes Bank AT1 Bonds, SREI Infra, and Reliance Home Finance highlight the risks of blindly chasing yield.
• Don’t be misled by user-friendly platforms: A sleek interface doesn’t reduce risk. Always read the fine print and evaluate the issuer’s financial health.
• Prefer safety? Choose RBI Retail Direct: For sovereign-backed safety and zero platform fees, G-Secs via RBI Retail Direct are a better option.
• Liquidity concerns matter: Many bonds have low trading volumes, making it hard to exit when needed.
• Diversify, don’t concentrate: For most investors, a diversified debt mutual fund or government bond exposure is safer than locking large sums in one company’s bond.

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

A Certified Financial Planner (CFP) can help you:

• Build a smarter debt allocation with credit risk mutual funds, not unregulated bonds
• Balance return potential with real-world liquidity and safety
• Match your portfolio with your actual life goals—not marketing promises

In short: Don’t risk your peace of mind for a few percentage points.