OBPP — buying corporate bonds online.
Fixed coupons, real credit risk — and why this isn't your FD
Priya's FD was safe. Her corporate bond had no safety net.
Priya moved her savings into a corporate bond after seeing a fixed coupon higher than her FD rate. The extra return looked like easy money. Eighteen months later, the company stopped paying. DICGC covered her FD. Nothing covered her bond.
A corporate bond is a loan you give to a company. They pay you fixed interest — the coupon — each year. At the end of the term, they return your principal. That is the entire structure.
A bank FD comes with a safety net. DICGC insures your deposits up to ₹5 lakh per depositor per bank. That is deposit insurance — real and legally backed. A corporate bond has no such insurance. If the company runs into trouble and cannot pay, you bear the loss. The extra coupon a bond offers is partly compensation for that missing protection.
SEBI-accredited agencies — CRISIL, ICRA, and CARE — assess each bond issuer. The scale runs from AAA at the top to D at the bottom. AAA means the agency considers this issuer very unlikely to default. D means it already has. A lower-rated issuer pays a higher coupon. That higher coupon is not generosity. It is the market's price for the additional risk you are taking on.
Until 2022, buying listed bonds required at least ₹1 lakh per lot. SEBI's Online Bond Platform Provider framework changed that. Minimum investment on SEBI-regulated OBPPs is now ₹10,000. Registered platforms include Wint Wealth, IndiaBonds, GoldenPi, and Jiraaf. SEBI issued an investor alert in November 2025 warning against unregistered platforms operating without OBPP registration. Verify any platform at sebi.gov.in before you invest.
The neighbour who reprices your bond daily
Imagine a neighbour who walks up to your door every morning with a new price for your bond. When interest rates rise, he offers you less. When they fall, he offers more. His mood follows every RBI announcement. He can be very convincing when prices are good and very discouraging when they are bad. Here is what matters: if you hold to maturity, his daily price is irrelevant. You already know your coupon and your repayment date. India's secondary bond market is thin — most retail investors cannot exit early without a price cut. Plan to hold. Ignore the neighbour.
Why this matters
You probably already hold FDs for your safe money. Corporate bonds can sit in the same part of your portfolio — but only once you understand the trade. You gain extra yield. You lose the DICGC safety net. The decision comes down to two things: the issuer's credit rating and the platform's SEBI registration. Start with AAA or AA+ rated bonds from established companies. Keep your first maturities short — one to three years — while you learn how this instrument behaves. Spread across two or three issuers so one default does not wipe your entire allocation. Always verify the platform at sebi.gov.in before you transfer money.
The coupon is fixed. The safety net is not.
Where people go wrong
- Treating high yield as a bargainA high coupon does not mean generosity. It means the market prices this issuer as risky. The coupon is the price of the risk you are accepting. When a company defaults, you do not collect that premium — you lose principal.
- Investing through unregistered platformsSome websites offer bond-like products at rates above what SEBI-registered OBPPs offer. SEBI issued an investor alert in November 2025 against exactly these platforms. An unregistered platform carries risks no coupon can compensate.
- Expecting FD-like liquidityMost corporate bonds cannot be sold before maturity without accepting a price cut. India's secondary bond market is thin. If you may need your money back early, this is the wrong instrument.
- Reading the coupon before the credit ratingThe rating and the issuer's financial health matter more than the headline number. A higher coupon from a weaker issuer is not a better deal — it is a warning dressed as a reward.
Corporate bonds pay more than FDs because they carry credit risk — no DICGC net covers you if the issuer defaults.
Always check the credit rating before the coupon. AAA is safest; a high yield almost always signals a weaker borrower.
Verify any OBPP at sebi.gov.in. SEBI flagged unregistered platforms in November 2025 for operating without OBPP registration.
People file corporate bonds next to FDs in their minds because both offer a fixed rate. The DICGC safety net disappears in that mental filing — and most investors only notice the difference after a default.