The process of investing in corporate bonds is as simple as investing in any other instrument. When a company issues bonds, you will have to fill out an application form and submit it to any branch of the issuing company with the application fee and required documents. These documents may include a copy of your PAN card, address proof, identity proof, etc. If you have a demat account, you can fill out the details in the form, and the bonds will get credited to it. In case you do not have a demat account, you can choose to receive the bonds in a physical format.
Government bonds, unlike shares, are not traded on the stock market. They are sold through official distributors and designated branches of banks and post offices. To invest in bonds, you will need to visit any branch designated with applications and submit a filled-up application form. After your request is processed, you will receive a bond certificate in your name.
Hindu undivided families and any Indian resident who is not a minor can invest in these bonds. A person should ideally submit only one application. Multiple applications will be aggregated based on the permanent account number or PAN. The tax benefit will be allowed only on investment up to Rs 20,000. The bonds can be held both in demat and physical forms.
While the process of investing in bonds is quite simple, selecting the best type of bond might be difficult, especially if you are new to making investments in the debt market. If you are unsure of the facts or need guidance in the process, taking professional advice can clear the picture for you.