Is there a mid-point where we can get a decent yield at reasonably low risk? The solution is corporate bonds. Until now it was very difficult for retail investors to buy corporate bonds from the exchange due to less liquidity. Treasury and HNI are able to buy these from their brokers. It’s better to choose a few and credible names than to put money in a fund with multiple risky credits!
Now it is possible to buy and trade corporate bonds for retails investors using a fintech platform called GoldenPi!
Why Corporate Bonds on Golden Pi?
- The yields are higher than most FD and you can choose the borrower you want to invest in
- You can sell the bond earlier for liquidity or as a trading call
There are 3 ways to make returns from your bond investment:
- Hold the bond till maturity and earn interest
- Hold the bond and when the market stabilizes or when interest rate dips sell the bond at lower yield and book profit i.e say HDFC 2 year bond trading at 8% today. In 3 months it might trade at 7%, hence your bond portfolio (Market Value is negatively correlated to Interest )will make money which you can capitalize by selling the bond in exchange to someone who is willing to buy or sell it on the Golden PI platform.
- Carry Return: This is an interesting aspect lot of people are unaware of.
For a similar bond, risk is higher for a longer tenor hence higher return. Carry is a form of reward for holding long-dated security. A 2-year HDFC bond might be yielding 8% and a 1 year 7%.
If you hold 2-year HDFC 8% for 1 year you will get 1% extra as it has to yield 7% after 1 year hence you end making close to 9% instead of 8%
How to buy Goldenpi corporate bonds?
Buying bonds on GoldenPi is very simple. You need to simply register on the platform and buy the bonds. There are no charges for buying bonds and they are delivered to your Demat account just like shares.
GoldenPi Founding Team
Which bonds to buy?
In these tough times it’s paramount you buy the safest of the names. Some of the best names you can consider buying are:
As of now, Golden Pi doesn’t charge the customers for any transaction
- Are there any Golden Pi alternatives in the Indian market?
There are alternative Investment Platform which have high yield instruments but in the corporate bond space Golden Pi is the largest and most trusted player.
- Is the platform Golden Pi by Zerodha?
Golden Pi is backed by Zerodha Founder’s Venture capital arm Rainmatter. Rainmatter is a financial technology focussed fund and incubator set up by Zerodha
In this GoldenPi review, we have tried to cover all aspect. Corporate bonds are a good substitute for FD provided you choose good names and are not looking for very high liquidity!