Four real, currently relevant examples spanning the risk-and-coupon spectrum available to Indian investors — from a government-backed savings bond to a corporate NCD. New to bond terminology? Start with our bond basics primer first.
By the ReviewHub Editorial Team · Last updated · Sourced from RBI notifications and issuer prospectuses
RBI Floating Rate Savings Bond (2020)
Sovereign · retail savings bond
Sovereign
8.05%p.a. (Jul–Dec 2026, floating)
Tenure
7 years
Payout
Semi-annual
Eligibility
Resident individuals & HUFs only
Tax status
Taxable
Rate resets every 1 Jan and 1 Jul, set at the National Savings Certificate (NSC) rate + 0.35% — it moves with NSC, not with your expectations of where rates are headed.
Government of India 10-Year G-Sec
Sovereign · benchmark bond
Sovereign
~7.19%yield (as of 28 Sep 2026)
Tenure
10 years
Payout
Semi-annual
Eligibility
Open to all (via RBI Retail Direct, brokers, or bond funds)
Tax status
Taxable
The reference point the rest of India's bond market is priced against. Yield moves daily with rate expectations and inflation data — it jumped to a 2.5-year high this week as crude oil prices and a weaker rupee pressured the bond market. The 7.19% figure is a snapshot, not fixed.
Power Finance Corporation (PFC) NCD
PSU · non-convertible debenture
AAA
6.85% – 7.05%p.a. (Jan 2026 public tranche)
Tenure
Varies by series
Payout
Series-dependent
Eligibility
Open to all
Tax status
Taxable
A government-owned NBFC's public NCD issue — illustrates how even a AAA-rated issuer prices only modestly above sovereign G-Secs.
Muthoot Fincorp NCD
NBFC · non-convertible debenture
AA (CRISIL)
8.56% – 9.25%p.a. (2026 public issue, by payout option)
Tenure
Series-dependent
Payout
Monthly, annual, or cumulative options
Eligibility
Open to all
Tax status
Taxable
A meaningfully higher coupon than the PSU/sovereign examples above — the market's way of compensating for a lower-rated, less liquid issuer. Higher coupon is compensation for risk, not a bonus.
Risks every bond carries, in different amounts
Interest rate (price) risk
When market rates rise, existing bonds with lower fixed coupons become less attractive, so their resale price falls — and vice versa. This only matters if you sell before maturity; holding to maturity, you still get the coupon and face value as promised.
Credit / default risk
The risk the issuer can't pay. A credit rating (AAA down to D) is one agency's opinion at one point in time — not a guarantee, and ratings have been wrong before, including on debt that later defaulted.
Liquidity risk
Many Indian corporate bonds trade thinly on the secondary market. Selling before maturity may mean accepting a worse price than the bond's "fair" value, simply because few buyers are around.
Reinvestment risk
If rates fall by the time your bond matures or a coupon is paid out, reinvesting that money at a comparable rate may no longer be possible — a real risk for shorter-tenure or higher-coupon bonds bought precisely because rates were high.
Coupon rates, yields, and terms shown are sourced from public reporting (RBI notifications, issuer prospectuses, and financial news coverage) as of late September 2026, and change over time — floating-rate coupons reset every six months, G-Sec yields move daily, and new NCD tranches carry their own separate terms. This is not a live feed; always confirm current terms directly with the issuer or your broker before investing. Nothing on this page is investment advice or a recommendation to buy any specific bond. Always do your own research or consult a registered investment adviser before making financial decisions.