Debt funds or direct bonds? Understanding the routes to fixed income investing

SEBI reduced the minimum face value of privately placed corporate bonds to ₹10,000, making direct bond investing more accessible.

Online Bond Platform Providers (OBPPs) and bond houses now enable retail investors to buy curated baskets of bonds digitally.

Debt mutual funds offer professional management, diversification, and liquidity, making them suitable for liquidity-focused investors.

Direct bond investing allows yield pickup from investment-grade bonds rated below AAA, which AIFs and PMS previously accessed with higher minimums.

Investors with a long horizon comfortable holding to maturity may construct their own bond portfolio, while debt funds remain better for those needing liquidity.