How to Start Earning Fixed Income from Corporate Bonds: Tips by Srishti Gosavi

Are you looking to earn a fixed income from your investments? Corporate bonds might be the perfect solution. Srishti Gosavi, a finance influencer, shares her insights on how you can start earning from corporate bonds. With recent changes in investment requirements, now is a great time for retail investors to explore this opportunity. Read on to find out how you can take advantage of corporate bonds for steady income.

1. Lower Minimum Investment: A Game Changer for Retail Investors

We all love the idea of fixed income, but finding investments that provide it can be challenging. Privately placed corporate bonds have often been overlooked due to their high minimum investment requirement of 1 lakh. However, the Securities and Exchange Board of India (SEBI) has recently reduced this to 10,000, making it much more accessible for retail investors. This change opens up new opportunities for those looking to earn a steady income from their investments.

2. Key Factors to Consider Before Investing in Bonds

When investing in corporate bonds, there are three crucial factors you need to consider:

• Credit Rating: The credit rating of a bond indicates its risk level. It's essential to check the credit rating to ensure you are not investing in a highly risky bond. Most online platforms that offer bonds will display their credit ratings. Generally, A-rated bonds yield around 11-12%, while AA-rated bonds yield approximately 9-10%.
• Duration: The duration of a bond is the period for which you will stay invested. Bonds can be short-term or long-term, depending on your investment horizon and liquidity needs. Determine how long you want to lock in your money before making a decision.
• Coupon Rate: The coupon rate is the interest rate that the bond pays. Riskier bonds typically offer higher returns compared to safer government bonds, which have lower coupon rates. Your risk appetite and due diligence will guide your choice. While A-rated bonds offer higher yields, they come with more risk compared to AA-rated bonds.

3. Platforms to Invest in Corporate Bonds

There are several platforms you can use to invest in corporate bonds:

• Online Bond Platforms: These platforms provide direct access to the bond markets, making it easy to browse and invest in various bonds. They offer user-friendly interfaces and detailed information about each bond, including credit ratings and coupon rates.
• Demat/Investment Platforms: Your existing demat or investment platform may also offer bond investment options. This allows you to keep all your investments in one place, simplifying portfolio management. Check with your current platform to see if they provide access to corporate bonds.

4. Srishti Gosavi's Bond Investments

Srishti Gosavi has personally invested in two corporate bonds: Hella Infra and Edelweiss. Both bonds offer returns above 10%. Hella Infra provides monthly coupon payments, while Edelweiss has a different redemption structure. Although these specific bonds are currently closed for investing, they serve as examples of how corporate bonds can offer attractive returns.

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Investing in corporate bonds is a viable way to earn fixed income, especially with the reduced minimum investment requirement set by SEBI. By considering key factors like credit rating, bond duration, and coupon rate, you can make informed decisions that align with your financial goals. Platforms for bond investment are readily available, making it easier than ever to get started. Follow Srishti Gosavi's tips to begin your journey towards earning a steady income from corporate bonds.