Comparison guide
Bonds vs NCDs vs Debt Funds — Which Fixed-Income Vehicle Wins?
Three doors to fixed income — each with a different lock, key and view. Pick the right one for your tax slab and time horizon.
// direct bonds
G-Secs, SDLs, PSU/corporate bonds bought on NSE/BSE or via RBI Retail Direct. Pros: highest yield to maturity, full transparency, no fund management fee. Cons: minimum ticket often ₹10,000–₹1,00,000 per bond, thin secondary liquidity.
// listed ncds
Issued by NBFCs and corporates with retail-friendly ₹1,000 face value, listed for liquidity. Higher yields (8–10%) for AA-rated, more for lower-rated. Credit risk is real — diversify across issuers.
// debt mutual funds
Diversified across many issuers, professionally managed, daily liquidity. Post Apr-2023 they're taxed at slab rate. Best for lower tax brackets, short-to-medium horizons or when you want to avoid issuer concentration.
// frequently asked questions
Yes — for very conservative investors. They yield NSC rate + 0.35% (~8.05% currently), have 7-year lock-in and are sovereign-backed. Taxable at slab rate.