Purchase Corporate Bonds On Online Bond Platforms: Fees And Process Compared

By Author: Ravi Fernandes
Total Articles: 126
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When I compare online bond platforms, I want to understand what I will pay, what I am buying and when the bonds will reach my demat account. A high return may attract my attention, but it does not answer these questions. For anyone planning to purchase corporate bonds, understanding the process is just as useful as comparing returns.
A corporate bond is a loan that an investor gives to a company. The company agrees to pay interest and repay the principal according to the bond’s terms. However, these payments depend on its ability to meet its obligations. Buying through an online platform makes the transaction convenient; it does not remove the investment risk.
My first check is the platform’s registration. I would verify its status using the exchange lists linked on SEBI’s website. This gives me a clear starting point before sharing documents or transferring money. SEBI has specifically advised investors to verify the registration of online bond platforms before transacting.
Before I purchase corporate bonds ...
... /strong>, I would compare the same bond across platforms. The ISIN, which is the bond’s unique identification number, helps me confirm that the offers refer to the same security. Comparing only company names can be misleading because one company may issue several bonds with different repayment dates and terms.
I would then compare the purchase price, yield to maturity and total payment for the same quantity and settlement date. The coupon tells me the interest payable on the bond’s face value. Yield to maturity takes the purchase price into account, along with the scheduled payments. Neither figure is a guarantee of what I will earn.
Fees deserve a separate check. I would look for brokerage, transaction or settlement charges, applicable taxes and any demat account charges. A zero-brokerage offer answers only one part of the cost question. I still need to see the final amount payable and understand each component.
Accrued interest can explain why that amount is higher than expected. This is interest that has built up since the previous coupon date. When applicable, the buyer compensates the seller for this period. I would treat it separately from platform fees because it serves a different purpose.
The buying process usually involves completing KYC, linking bank and demat details, choosing a bond and reviewing the order before payment. At this stage, I would read the credit rating rationale, interest payment schedule and maturity terms. I would also check whether the issuer can repay the bond early.
Next comes corporate bond settlement, when the transaction’s money and securities are exchanged. Under SEBI’s framework, relevant listed debt orders placed through online bond platforms are routed through a recognised exchange’s RFQ platform and settled through its clearing corporation.
NSE’s RFQ platform supports T+0 and T+1 settlement for corporate bonds. These mean settlement on the trade date or the next settlement working day. I would check the date shown for my order rather than assume that an online payment means immediate delivery.
Finally, I would consider how I could sell before maturity. A listed bond may not always have a willing buyer at a suitable price. For me, a useful comparison brings together the total cost, bond risks, payment terms and settlement details. That makes the decision more informed than choosing whichever platform displays the highest yield.