Fixed Income with an Edge: Why BONDS deserve a look

Fixed income is evolving — and it’s no longer just about fixed deposits.

Over the last 5 years, Indian investors relying solely on FDs may have missed out on meaningful yield enhancement. Data shows that AA and A-rated bonds consistently delivered 1.5–3% higher returns than fixed deposits, without significantly increasing credit risk. 

📊 What's Driving the Edge?

• Credit spreads across rated bonds (AAA, AA, A) offered a steady yield premium
• While FD rates fluctuated with repo, bonds offered stability, tradability, and market-linked pricing
• AAA bonds outperformed GSecs in key periods — offering better returns

🧠 Why This Matters:

• Bonds offer customization across tenure, credit, and structure
• They provide exit flexibility that locked-in FDs do not
• With digital platforms, bonds are now more accessible to retail investors

As spreads narrow but remain meaningful, it’s time investors viewed bonds not just as a trading instrument—but as a core part of a diversified fixed income allocation.