How bond SIPs differ from equity SIPs

Equity SIPs use rupee-cost averaging by buying more units during market dips and fewer during rallies, exploiting stock price volatility.

Bond SIPs in high-quality corporate bonds or government securities average interest rates, not prices, because price fluctuation is minimal.

Each bond SIP instalment locks in the prevailing market yield, creating a natural yield ladder across the interest rate cycle.

Month-to-month allotment deposits matching bonds directly into a demat account with periodic interest payouts to a linked bank account.

The bond SIP setup has no lock-in period and can be paused or cancelled anytime, but purchased bonds must be held to maturity or sold on the secondary market.