Invest · Bonds & fixed income
Understand the income. Know the risk.
A bond sets out what an issuer owes you. Before you invest, look at who is borrowing, when you need the money and what could interrupt repayment.
You lend money on agreed terms.
Explore investmentsGovernments and companies issue bonds to borrow. The terms set out interest, if any, and when the principal is due to be repaid.
Those terms do not make every bond safe. An issuer may fail to pay, market prices can change and you may not be able to sell when you want to.
SEBI’s asset-class guide
Not all fixed income works the same way.
The issuer, instrument and structure change what you own and the risks you take.
Government securities
Issued by a government, with payment and maturity terms set for each security. Market prices can change, particularly as interest rates move.
Corporate bonds
Issued by a company. Assess its ability to meet payments, the bond’s terms and the protection available if it cannot pay.
Tax-free bonds
Some bonds have specific tax treatment for interest. Check the issue terms and current rules for your circumstances; do not assume every receipt or sale is tax-free.
Bond funds
Hold a portfolio of debt instruments. You own fund units, not a bond with a promised redemption value on your own chosen date.
Before you invest
Look beyond the quoted yield.
A higher yield can come with greater risk. Understand the conditions behind the number.
Who will repay you?
Assess the issuer, credit quality and security terms. A credit rating is information to consider, not a guarantee.
When will you need the money?
Compare the maturity, payment schedule and any early redemption conditions with your own needs.
What if you need to sell?
Check liquidity and the risk of a price change. Longer-dated fixed-rate bonds can be more sensitive to interest-rate movements.
What will you keep after costs?
Read the charges and obtain tax guidance relevant to your circumstances. A quoted yield is not the same as your final return.
Think about the whole allocation.
Your goals, existing investments and time horizon help define the role of fixed income in your portfolio.
Discuss the allocation you have in mind, then compare Savart plans for the investment coverage and support you need.
Compare advisory plansQuestions about bonds.
What is a bond?
A bond is a way for an issuer to borrow money. Its terms specify payments and repayment, but the issuer’s ability to pay and the terms of the security remain important risks.
Does fixed income mean a fixed return?
Not necessarily. Contractual payments do not remove default risk. A bond’s market value can change before maturity, and selling early may result in a loss. Bond funds also change in value.
What happens when interest rates rise?
Existing fixed-rate bond prices generally fall when market interest rates rise, all else equal. The size of the change depends on factors including the bond’s maturity and cash flows.
Can I sell a bond before maturity?
That depends on the instrument and the available market. Some bonds can be difficult to sell, and the price may be below what you paid. Read the exit, liquidity and redemption terms before investing.
Put fixed income in context.
Talk through your goals and the role you want the investment to play.