Looking to invest your money for a shorter period? Short-term bonds maturing within a year can be an option worth exploring. These are listed debt securities with a
Get Rewarded With Offers And Discounts
13.52% Sold
12.00%p.a.
Tenure
11M
Payout
Monthly
Rating
BBB+
21.4% Sold
11.75%p.a.
Tenure
7M
Payout
Monthly
Rating
A-
86.18% Sold
11.65%p.a.
Tenure
9M
Payout
Quarterly
Rating
A
74.71% Sold
11.55%p.a.
Tenure
10M
Payout
Monthly
Rating
BBB+
The Golden Experience of Investing
96.03% Sold
10.89%p.a.
Tenure
9M
Payout
Monthly
Rating
A-
61.02% Sold
9.80%p.a.
Tenure
9M
Payout
Monthly
Rating
AA-
98.68% Sold
9.50%p.a.
Tenure
3M
Payout
Quarterly
Rating
BBB
Unlike long-term bonds, which may require you to stay invested for several years, these bonds have shorter maturity periods. Depending on the bond's terms, you may receive regular interest payments along with the principal amount at maturity.
Whether you are planning a future expense, managing surplus funds or exploring fixed-income investments, short-term bonds offer another way to put your money to work.
Short-term bonds are debt investments that have a relatively short remaining maturity period. When you invest in these bonds, you lend money to the issuer for a specified period. In return, the issuer is required to make interest payments and repay the principal as per the bond's terms.
One of the main features of these bonds is their shorter maturity period. Investors who do not want to keep their money invested for several years can explore bonds that mature within the next 12 months.
The shorter tenure also generally means lower interest rate sensitivity compared with otherwise similar longer-maturity bonds. However, bond prices can still fluctuate, and credit and liquidity risks remain.
Short-term bonds are listed debt securities with a remaining maturity of 12 months or less. These may include corporate bonds, Non-Convertible Debentures (NCDs), PSU bonds and other eligible listed debt securities, depending on their availability and maturity dates.
When you purchase a bond, you lend money to the issuer. In return, you receive interest payments according to the agreed schedule, if the bond carries a periodic coupon. Once the bond reaches maturity, the issuer is required to repay the principal amount as per its terms.
For example, if you purchase a bond that matures in eight months, your investment period is relatively short compared with a bond that matures in five years.
These bonds can be considered by investors who want to explore fixed-income opportunities while keeping their investment horizon relatively short. However, they should not be treated as a replacement for savings accounts or liquid funds, as their liquidity and repayment risks are different.
Short-term bonds can be useful for investors who want to align their investments with specific financial requirements.
Here are some reasons investors explore this category:
Let's understand how a short-term bond investment works with a simple example.
Suppose you invest ₹30,000 in a bond with a 12% annual coupon rate and a maturity period of 12 months. Assume the bond is purchased at its face value and offers monthly interest payments.
Here is how your investment may work:
| Particular | Amount |
|---|---|
| Initial Investment | ₹30,000 |
| Annual Coupon Rate | 12% |
| Total Interest | Over 12 Months ₹3,600 |
| Principal Repaid at Maturity | ₹30,000 |
| Total Amount Received | ₹33,600 |
In this example, you receive ₹300 as monthly interest for 12 months, amounting to ₹3,600 in total. At maturity, the issuer repays your original investment of ₹30,000.
This is an illustrative example before taxes and other applicable costs. Actual returns depend on the bond's purchase price, coupon terms, payment schedule and the issuer's ability to make payments.
Although short-term bonds have shorter maturity periods, they are not risk-free. Before investing, it is important to understand the risks associated with them.
Understanding these risks can help you choose bonds that better match your investment horizon and risk appetite.
Investing in bonds through GoldenPi is a simple online process. You can explore available bonds, compare their features and complete your investment online.
Follow these steps:
With GoldenPi, you can explore different fixed-income investment opportunities and review their key details in one place.
The taxation of short-term bonds depends on the type of security, interest earned, capital gains and the investor's applicable tax status.
Here are some important points to understand:
1. Tax on Interest Income
Interest earned from taxable bonds is generally added to your total income and taxed according to your applicable income-tax slab.
2. Tax Deducted at Source (TDS)
For tax year 2026-27, TDS on interest on securities is generally applicable at 10% for resident investors when the aggregate interest exceeds ₹10,000 during the financial year, subject to applicable provisions and exemptions.
3. Tax on Capital Gains
If you sell a listed bond before maturity at a price higher than your purchase price, the resulting profit may be taxable as capital gains.
For listed bonds, a holding period of more than 12 months is generally required for long-term capital gains treatment. Gains on listed bonds held for 12 months or less are generally treated as short-term capital gains and taxed at the applicable slab rates.
Long-term capital gains on eligible listed bonds are generally taxed at 12.5% without indexation.
4. Tax at Maturity
If a bond is redeemed at maturity, any gain arising from the difference between its acquisition cost and redemption value may have tax implications depending on the nature and classification of the security.
Note: Tax treatment can vary depending on the bond type, holding period and applicable income-tax provisions. Investors should consult a tax professional for advice specific to their circumstances.
Short-term bonds maturing within a year can be an option for investors looking to explore fixed-income investments with a shorter maturity period.
They offer access to different issuers, interest payment structures and maturity dates, allowing investors to compare opportunities based on their financial goals and risk appetite.
However, a shorter maturity does not eliminate investment risks. Credit quality, issuer financials, liquidity and the bond's terms remain important factors when making an investment decision.
At GoldenPi, you can explore available short-term bonds, compare their ratings and yields, and review important investment details before making a decision.
