How to Buy Bonds on Upstox Online – A Complete Guide for Indian Investors

Many people in India want to put money in safe places. Fixed deposits are one choice. But bonds are also a very good choice. Bonds give you fixed returns. They also feel less risky than stocks.

If you use Upstox, you can buy bonds online. It is easy. But many people do not know the steps. This article will show you exactly how to buy bonds on Upstox. We will also look at corporate bonds, government bonds, and NCDs.

What Are Bonds in Simple Words?

Think of a bond like a loan. You give your money to a company or the government. They promise to give you back your money after some years. Until then, they pay you interest every few months. This interest is your earning. This is why people buy bonds it is a steady income.

Bonds are safer than stocks. Stocks go up and down a lot. Bonds do not change much. That is why older people and new investors like bonds. Upstox lets you buy bonds just like you buy shares. You need a demat account. You need money in your trading account. Then you can start.

Read More: Difference Between Bonds and Debentures Simple Guide for Indian Investors

What You Need Before You Buy Bonds on Upstox?

Before you try to buy any bond, check these three things.

First, you must have an Upstox demat account. If you do not have one, you can open it from the Upstox app or website. It takes two or three days. You need your PAN card, Aadhaar card, and a photo.

Second, you need money in your Upstox trading account. You add money from your bank through UPI or net banking. Once money comes, you can use it to buy bonds.

Third, you need to know the bond name or its code. On Upstox, bonds are listed with a special symbol. You can search by the company name or the bond name. Once you have these three things, you are ready.

Step by Step How to Buy Bonds on Upstox Online

Now we come to the main part. Follow these steps carefully.

Step 1 – Open Upstox App or Website

Open the Upstox mobile app on your phone. Or open the Upstox website on your computer. Log in using your user id and password.

Step 2 – Go to the Search Bar

At the top of the screen, you see a search bar. It has a magnifying glass icon. Tap on it.

Step 3 – Type the Bond Name

• Type the name of the bond you want to buy. For example, you can type "HDFC bond" or "REC bond". You can also type the code if you know it.
• Sometimes bonds do not show up. Then type "bond" and see the full list. Upstox shows all available bonds there.

Step 4 – Select the Bond

From the search result, tap on the bond name. A new page opens. On this page, you see the current price. You also see the interest rate. You also see the maturity date.

Step 5 – Click on Buy

You see a green button that says "Buy". Tap on it. A small box opens.

Step 6 – Enter Quantity

• Bonds are bought in lots. One lot usually has one bond. But some bonds have lot size of 10 or 100. Upstox shows the lot size clearly.
• Enter how many bonds you want to buy. If lot size is one, you can buy 1, 2, or 5 bonds.

Step 7 – Choose Price Type

You see two choices – limit price and market price.

Choose limit price. In limit price, you decide the maximum price you will pay. This is safer. Because bond prices move up and down. Type your price then click on buy.

Step 8 – Confirm the Order

Upstox shows a final confirmation page. Check the quantity and price. Then click on "Confirm". Your order goes to the market. If your price matches a seller, the order is done. The bonds come to your demat account in two days.

How to Buy Corporate Bonds in Upstox?

Corporate bonds are bonds given by companies. For example, Tata, Reliance, HDFC, and L&T give corporate bonds. These bonds pay more interest than government bonds. But they have a little more risk.

To buy corporate bonds in Upstox, follow the same steps above. But here is a small trick.

When you search, type the full company name and then the word "bond". For example, "Tata Motors bond" or "Aditya Birla bond".

Upstox shows only those corporate bonds that are listed on the stock exchange. Many good corporate bonds are listed on NSE and BSE. You can buy them easily.

One important thing. Corporate bonds have different interest rates. Some give 8 percent. Some give 9 percent. Some give 10 percent. Always check the interest rate before buying.

Also check the maturity year. If a bond matures in 2030, you get your full money back in 2030.

How to Buy Government Bonds in India Using Upstox?

Government bonds are also called G-sec. They are given by the central government or state government. These are the safest bonds in India. The government never misses paying interest.

But here is a very important thing. Upstox does not directly show all government bonds like RBI Retail Direct. On Upstox, you can only buy those government bonds that are listed on NSE. These are called NSE GoBid bonds. They are less in number. But they are available.

To buy government bonds on Upstox, follow these steps.

• Open search bar. Type "GSEC" or "GOBID". You will see a list of available government bonds. Each bond has a name like "7.32 GS 2024" or "6.18 GS 2029".
• The first number is the interest rate. For example, 7.32 means 7.32 percent interest per year. The last number is the maturity year. 2024 means the bond ends in 2024.
• Select the one you like. Then click buy. Rest steps are same as above.
• If you want to buy all types of government bonds like 7.1 percent GS 2033 or 7.3 percent GS 2042, then Upstox may not have them. For that, you use RBI Retail Direct. But for normal investors, Upstox government bonds are enough.

How to Buy Upstox NCD (Non Convertible Debentures)?

NCD stands for Non Convertible Debenture. It sounds hard. But it is just another type of bond. Companies give NCDs to raise money. You cannot convert NCDs into shares. That is why they are called non convertible. In India, many companies launch NCDs. For example, Shriram Transport, Muthoot Finance, and PFC launch NCDs every year.

Upstox lets you buy NCDs when they are listed on the stock exchange. You can also apply for new NCDs through Upstox.

To apply for a new NCD (just like an IPO), go to Upstox app. Click on "IPO" or "Issues". Look for a section called "NCD". If any NCD is open for application, you see it there.

• Click on it. Fill your amount. Apply. The NCD comes to your demat account after allotment.
• To buy existing NCDs from the market, search by the NCD name. For example, type "Shriram NCD". Then buy like a normal bond.
• NCDs give good interest. Some give 8.5 percent to 9.5 percent. But NCDs also have risk. Always check the credit rating. If rating is AAA, it is safe. If rating is AA or A, it has higher risk.

You May Also Read: RBI Bonds for Senior Citizens: How to Buy the Floating Rate Savings Bond

Difference Between Bonds, Corporate Bonds, Government Bonds and NCDs

Many readers get confused. Let us clean this in simple words.

• Bonds – This is the big family. All bonds give fixed interest.
• Corporate Bonds – Bonds from companies. Higher interest. Slightly higher risk.
• Government Bonds – Bonds from Indian government. Lowest interest. Lowest risk.
• NCDs – A special type of corporate bond. Cannot convert to shares. Gives good interest.

On Upstox, you can buy all four types. The buying process is the same.

Things to Check Before Buying Any Bond on Upstox

Do not rush to buy a bond. First check these five things.

1. Interest Rate

How much interest does the bond give per year? If it gives 7 percent, you get 7 rupees per year for every 100 rupees. Compare with fixed deposit rates. If bond gives less than FD, then do not buy.

2. Maturity Date

When will you get your full money back? If maturity is 2030, you wait until 2030. If you need money early, do not buy long term bonds.

3. Credit Rating

CRISIL, ICRA, and CARE give ratings. AAA is best. AA is good. A is okay. BBB and below are risky. Never buy low rated bonds.

4. Lot Size

Upstox shows lot size. Some bonds need you to buy 10 or 100 at once. Check your budget.

5. Trading Price

Bonds have a face value of 100 rupees. But they trade at 98 or 102 or 105. If you buy at 105, you pay more. If you buy at 98, you get discount. Learn to see the price clearly.

Charges and Costs When Buying Bonds on Upstox

Upstox does not take huge charges for bonds. But some small charges are there.

• Brokerage – Upstox charges low brokerage for bonds. For normal bonds, it is near zero to 5 rupees per order.
• Exchange charges – NSE and BSE take very small fee.
• GST – 18 percent on the brokerage.
• SEBI charges – Very small amount.

For most small investors, total charges are less than 20 rupees per order. It is fine.

No stamp duty on bonds like shares. That is a good thing.

Common Mistakes People Make While Buying Bonds on Upstox

I see many people doing these mistakes. Avoid them.

Mistake 1 – Buying at Market Price

Market price changes every second. If you buy at market price, you may pay more than the real price. Always use limit price.

Mistake 2 – Not Checking Maturity

Someone buys a 20 year bond by mistake. Then they need money after 2 years. They have to sell at loss. Always check maturity year.

Mistake 3 – Forgetting Interest Dates

Bonds give interest on fixed dates. Some give every year. Some give every 6 months. Know when you will get your interest.

Mistake 4 – Buying Very Low Rated Bonds

High interest looks good. But if the company fails, you lose money. Stick to AAA or AA rated bonds.

Mistake 5 – Not Having Money in Account

You place an order. But money is not in trading account. Upstox cancels the order. Always add money before buying.

Final Words

Buying bonds on Upstox is very easy. You just need to learn the first time. Open the app, search the bond. Click buy that is all. Start with a small amount. Buy one government bond or one AAA corporate bond. See how it works after that, buy more.

Bonds are good for safe income. They are good for new investors. They are good for old people who do not want risk. Use Upstox and start your bond journey today.

If you still have doubt, try a dummy order without confirming. Upstox lets you see everything before final buy. Practice two three times. Then you will never make a mistake.

FAQs

Can I buy bonds on Upstox with 1000 rupees?

Yes. Many bonds are available for 1000 rupees or less. Check the price per bond.

Do I get interest in my bank account?

No. Interest goes to your Upstox trading account. You have to withdraw it to bank.

Is Upstox safe for buying bonds?

Yes. Upstox is a SEBI registered broker. Your bonds stay in your demat account with CDSL. Very safe.

Can I sell bonds before maturity on Upstox?

Yes. You can sell bonds anytime on Upstox when the market is open. But you may get less price.

Which gives more return – bonds or FD?

Good bonds give 1 to 2 percent more than FD. But FD is safer.

Do I pay tax on bond interest?

Yes. Interest from bonds is added to your income. You pay tax as per your income tax slab.

What is the best bond to buy on Upstox now?

That changes every week. Always check latest NCD issues and AAA rated corporate bonds.