A bond is just a loan you give to a government or a company. They pay you interest along the way, then hand your money back on a fixed date. Here's how it works — and the bonds Indians actually talk about, five in every category.
How a bond pays you
What you investInterest you collect
Start Here
Six words that unlock every bond
Get these and the rest is easy — every bond below reads the same way, only the names and numbers change.
Face value
What you get back
The principal printed on the bond, returned to you at maturity. Usually ₹1,000 or ₹10,000 in India.
Coupon
Your interest rate
The interest the issuer pays you, normally once or twice a year, worked out on the face value.
Maturity
When it ends
The date your loan finishes and the principal comes back. Anywhere from 91 days to 40 years.
Yield
Real return
What you actually earn if you buy at today's price — it moves opposite to price. "YTM" is yield if held to maturity.
Issuer
Who's borrowing
The central government, a state, a PSU, a bank or a company — whoever you're lending to.
Rating
How safe it is
A credit grade (AAA is safest) showing how likely the issuer is to pay you back on time.
The Whole Market
India's bonds, in five drawers
Tap any drawer to open it. Five of the most widely held or talked-about names per category — examples to learn from, not a ranking or recommendation. Figures are indicative as of early 2026.
1
Government Securities (G-Secs)
Debt issued or backed by the Government of India through the RBI — the safest rupee instruments, and the benchmark everything else is priced against.
Lowest credit risk
01
Dated Government SecuritiesLong-tenor central G-Secs like the 10-year benchmark; fixed coupon.
5–7%coupon, varies
02
Treasury Bills (T-Bills)Short-term paper of 91, 182 or 364 days. Sold cheap, redeemed at full value.
≤ 1 yrzero-coupon
03
State Development Loans (SDLs)Issued by state governments; a touch more yield than central G-Secs.
7–8%indicative
04
Sovereign Gold Bonds (SGB)Track gold + 2.5% interest. No new ones since Feb 2024 — buy older series on the exchanges.
Issued by government-owned companies to fund infrastructure. Not formally guaranteed, but public ownership plus high ratings give "quasi-sovereign" comfort. Interest is taxable.
Mostly AAA-rated
01
IRFCIndian Railway Finance Corporation — the financing arm of Indian Railways.
AAArating
02
RECRural Electrification Corporation — funds power and rural electrification.
AAArating
03
PFCPower Finance Corporation — a leading lender to the power sector.
AAArating
04
NABARDNational Bank for Agriculture & Rural Development.
AAArating
05
NHAINational Highways Authority of India — builds and maintains highways.
AAArating
3
Tax-Free Bonds
PSU bonds whose interest is fully exempt from income tax under Section 10(15). No fresh issues since ~2015–16, so these trade on the NSE/BSE — a favourite for top tax slabs.
Secondary market only · no new issues
01
NHAI Tax-Free BondsAmong the most liquid; long tenors stretching into the 2030s.
~7–8.75%coupon
02
IRFC Tax-Free BondsRailway-backed and widely traded on the exchanges.
~8.6%coupon
03
PFC Tax-Free BondsPower-sector issuer with steady investor demand.
~8.7%coupon
04
REC Tax-Free BondsHigh safety rating with attractive tax-free coupons.
~8.7%coupon
05
HUDCO Tax-Free BondsHousing & urban development; NTPC and IIFCL also feature here.
~7.6%coupon
4
Capital Gains Bonds (Section 54EC)
Sold a property and facing capital gains tax? Reinvest the gain in these within six months and you save the tax. 5-year lock-in, ₹50 lakh cap, fixed ~5.25% taxable coupon, AAA, not listed.
5-yr lock-in · ₹50L cap
01
REC 54EC BondsRural Electrification Corporation — one of the most-used issuers.
~5.25%p.a.
02
PFC 54EC BondsPower Finance Corporation — popular for property reinvestment.
HUDCO 54EC BondsHousing & Urban Development Corporation — a newer notified issuer.
~5.25%p.a.
05
IREDA 54EC BondsIndian Renewable Energy Development Agency — clean-energy financier.
~5.25%p.a.
5
Corporate Bonds & NCDs
Debt issued by private companies, often as Non-Convertible Debentures. They pay more than G-Secs to make up for credit risk — so here, the rating matters most.
Yield rises as rating falls
01
HDFC Bank BondsTop-tier private bank paper (and the erstwhile HDFC Ltd bonds).
AAArating
02
Tata Capital NCDsFinancing arm of the Tata group; frequent retail NCD issues.
AAArating
03
Bajaj Finance BondsOne of India's largest NBFCs; deep, liquid issuance.
AAArating
04
L&T Finance NCDsDiversified NBFC under the L&T group.
AAArating
05
Shriram Finance NCDsRetail-focused NBFC; higher yields for a notch lower rating.
AA+rating
Read any bond in one breath
Pick any name above and you can now describe it: who is borrowing (issuer), how much they pay you (coupon), for how long (maturity), and how safe they are (rating).
Higher safety usually means a lower coupon — that trade-off is the whole game. Government and PSU bonds sit at the safe, lower-yield end; corporate NCDs pay more but ask you to trust a company's balance sheet; tax-free and 54EC bonds win on tax treatment rather than headline rate.
Figures verified against public sources as of June 2026 · RBI Floating Rate Savings Bond coupon 8.05% (Jan–Jun 2026).
Disclaimer: BellsEye is an educational and financial literacy platform. We are not SEBI registered investment advisors. This page is for educational and informational purposes only and should not be considered investment advice. Rates, ratings and availability change often — Sovereign Gold Bonds have had no new tranches since February 2024, and tax-free bonds have not been freshly issued since around 2015–16. Always consult a certified financial advisor before making investment decisions.
