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Bonds, explained simply
Everything you need to read a bond listing with confidence. Five minutes, no jargon.
What is a bond?
A bond is a loan you give to a company or government. In return, the issuer pays you interest (the coupon) on a fixed schedule and repays the face value on the maturity date. Most bonds on Parmbh are NCDs (Non-Convertible Debentures): corporate bonds that cannot be converted into shares.
Coupon vs yield to maturity (YTM)
The coupon is the interest rate on the face value. The yield to maturity is the yearly return you would earn if you buy at today’s price, hold until maturity and every payment arrives on time. When a bond trades below face value its YTM is higher than the coupon, and vice versa. YTM is an estimate, not a promise.
Credit ratings
Agencies such as CRISIL, ICRA, CARE, India Ratings and Acuité grade how likely an issuer is to repay. Higher yields usually come with lower ratings, because investors want to be paid for taking more risk.
Rating agencies use standard definitions; in short:
| AAA | Highest safety. Lowest expected default risk. |
|---|---|
| AA (+/-) | High safety. Very low default risk. |
| A (+/-) | Adequate safety. Low default risk, but more sensitive to bad times. |
| BBB (+/-) | Moderate safety. The lowest “investment grade” band. |
| BB and below | Below investment grade. Meaningful risk of default. |
On Parmbh, the risk comfort filter only groups bonds by credit rating: AA- or above, A+ to A-, or BBB+ or below. It is not an assessment of any bond or of what suits you, and it is not SEBI’s Credit Risk-o-Meter. Ratings can change.
What the bond "Credit Risk-o-Meter" shows, and what it doesn't
SEBI requires bond issuers and online bond platforms to show a colour-coded "Credit Risk-o-Meter" for debt securities: in offer documents, in their advertisements, and on online bond platforms' websites and apps. The rule comes from a SEBI circular dated 7 October 2026 and applies from 21 November 2026, 45 days after it was issued.
What it shows. The meter places a bond's credit rating at one of six levels. It shows only credit risk.
| Long-term rating | Short-term rating | Level |
|---|---|---|
| AAA | A1+ | Lowest credit risk |
| AA+, AA, AA- | A1 | Very low credit risk |
| A+, A, A- | A2 | Low credit risk |
| BBB+, BBB, BBB- | A3 | Moderate credit risk |
| BB+, BB, BB- | A4+ | Moderate risk of default |
| B+, B, B-, C+, C, C-, D | A4, D | High to very high risk of default |
If a bond has more than one rating, the meter uses the lowest one. The platform may show all the ratings next to it.
Below the meter you'll see the name of the rating agency and the bond's actual rating. For unsecured bonds, the word "unsecured" appears in bold red. Unsecured means no specific assets back the bond.
"Issuer not cooperating". If a rating agency says the issuer is not cooperating with it, the meter points to a separate "Issuer not cooperating" mark instead of a level, and the text below says so.
Updates. Online bond platforms must use ratings from SEBI-registered rating agencies and update the meter within 24 hours of being told of a rating change by the depositories (NSDL or CDSL).
SEBI's caution shown with the meter: "The Credit risk-o-meter is based on evaluation of the credit risk of the issuer and does not constitute investment advice or a recommendation to invest. Investments in debt securities are also subject to market and liquidity risks." For unsecured perpetual bonds, such as AT1 bonds, platforms show a second warning: the meter doesn't reflect these bonds' structural risks, and they may carry the risk of total loss of the money invested.
What it doesn't show.
- It reflects credit risk, the chance that the issuer can't pay. It doesn't show liquidity risk (how easily you can sell) or interest-rate risk (how the price moves when rates change).
- It is based on a rating, and a rating is an agency's opinion that can change. The meter changes with it.
- It doesn't say whether a bond suits you, and it isn't a recommendation.
Parmbh doesn't show its own version of the meter. On Parmbh you can see each bond's rating as the agencies gave it, its security and its maturity, and compare up to 3 bonds side by side. Where a platform shows the meter, read it together with the rating and the bond's terms. Parmbh explains bonds; it doesn't tell you which one to buy.
Source: SEBI circular HO/17/11/22(1)2026-DDHS-POD1/I/23092/2026, 7 October 2026, Annexure-A.
Learn how credit ratings work · Compare bonds side by side
Secured, unsecured and seniority
A secured bond is backed by specific assets the bondholders can claim if the issuer defaults. An unsecured bond has no such backing. Senior bonds are repaid before subordinated ones. Security improves recovery chances but does not remove the risk of loss.
Maturity and payouts
Maturity is when your principal is due back. Interest may be paid monthly, quarterly, yearly or at maturity. Selling before maturity can be difficult, so the maturity date tells you how long your money may be tied up.
Risks to check
- Credit risk: the issuer may delay or miss payments.
- Liquidity risk: there may be no buyer if you want to exit before maturity.
- Interest-rate risk: bond prices fall when market interest rates rise.
- Reinvestment risk: payouts may have to be reinvested at lower rates.
- Concentration risk: putting a large share of savings into one issuer or sector.
Tax
Interest from most corporate bonds is taxable at your income-tax slab rate, and tax may be deducted at source. Gains on sale depend on the type of bond and how long you held it. Tax rules change, so check with a tax adviser.
NCD or bank FD? How the two differ
A bank fixed deposit (FD) and a non-convertible debenture (NCD) both pay interest for a set period. They are different kinds of product.
| Feature | Bank FD | NCD |
|---|---|---|
| What it is | A deposit with a bank | A loan to a company, often an NBFC |
| If the issuer fails | Bank deposits are insured by DICGC up to a limit per depositor per bank. Check the current limit at dicgc.org.in | No deposit insurance. Recovery depends on the company’s assets, whether the NCD is secured, and its ranking |
| Rating | Usually not rated | Rated by agencies such as CRISIL, ICRA, CARE, India Ratings. A rating is an opinion, not a promise |
| Exiting early | Premature withdrawal, usually with a penalty | Sold on the exchange if a buyer exists, at the market price, which may be lower |
| Price changes | None | The market price moves with interest rates and the issuer’s credit |
| Where you hold it | With the bank | In your demat account |
| Interest tax | Taxed as income at your slab rate. Tax may be deducted at source (TDS) | Taxed as income at your slab rate. Tax may be deducted at source (TDS) |
Listed yields on NCDs are often higher than FD rates. The higher yield is there because the investor takes more risk: credit, liquidity and price risk. A higher listed yield is not guaranteed, and it often comes with a lower rating.
Tax rules changed when the Income-tax Act, 2025 took effect. Check how your interest and any gains on sale are taxed with a tax adviser.
Learn how to read a bond’s rating · Browse bonds by rating
Before the yield: 5 things to check on any bond page
- Who is borrowing. The issuer is the company that has to pay you back. Look up what it does.
- The rating, and who gave it. Rating agencies grade bonds from AAA (highest) down through AA, A and BBB and below, with + and − marking finer steps. A lower grade means the agency sees a higher risk of default. Sometimes two agencies rate a bond differently (for example AA+ and AA), and the page shows both. A rating is an agency’s opinion and can change.
- Secured, unsecured or subordinated. Secured bonds are backed by specific assets. Unsecured bonds have no such backing. Subordinated bonds are repaid after other lenders if the issuer runs into trouble. Read the security and ranking before the yield.
- Maturity and payouts. Note when your money comes back and how often interest is paid: monthly, quarterly or annually. A bond close to maturity may have few or no interest payments left.
- Listed yield, minimum amount and date. The yield shown is a listed or indicative figure, not a guaranteed return. Check the date it was quoted and the minimum you would need to invest.
Parmbh explains bonds; it doesn’t tell you what to buy. Risk disclosure
Open the bond list and check these 5 things · Ask Parmbh AI what a term means
Before you invest
- Read the issuer’s offer document and the latest rating rationale.
- Understand when and how you will get paid, and what happens if you need the money early.
- Know how much of your savings would depend on any one issuer.
- For personal advice, speak to a SEBI-registered investment adviser.
Why some bonds say “View on Aspero” and others say “Request a call back”
Parmbh shows bonds from two sources.
Listed on Aspero. These bonds are listed on Aspero, an online bond platform provider (OBPP). The details come from Aspero’s listing. To invest, you continue to Aspero, which handles your KYC, payment and the transfer of the bond to your demat account. Parmbh does not handle your money.
Quoted by our partners. These are indicative quotes that our partners Nuvama and Trust Securities shared with us, shown with the date of the quote. Rates and availability change, and the minimum is usually higher, often ₹3 lakh or more. You can’t buy these online here. You request a call back, our team confirms the current rate and availability with you, and if you decide to go ahead the transaction is handled by the partner.
The same company can appear in both lists. One company often issues several bonds. Each has its own ISIN, maturity, rating, ranking (secured or subordinated) and minimum amount. Compare these details bond by bond, not company by company.
Whichever route you use, a listed yield is not guaranteed. Bonds carry credit, liquidity and interest-rate risk, and you can lose money. Parmbh explains bonds but does not tell you which one to buy. Read the risk disclosure
What happens after you request a call back
- You tell us which bond and how to reach you. We only need your name and mobile number. Email, city, the amount you have in mind and your question are optional.
- Someone from the Parmbh team contacts you. They may call, or email from support@parmbh.com. They confirm the current price, yield and availability. Partner quotes change, so the figure on the page may differ.
- The transaction is handled by Aspero or a partner. Aspero-listed bonds go through Aspero. Partner bonds go through Nuvama or Trust Securities. You will need a demat account and KYC with them. Before you go ahead, ask for the final price, yield and any charges or brokerage in writing.
- You decide. Asking for a call back does not commit you to anything. See our Privacy Policy.
We can explain how a bond works. We cannot tell you whether it suits you. For personal advice, speak to a SEBI-registered investment adviser.
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