Hidden Risks: What Can Go Wrong When Buying Bonds Online
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Online Bond Buying: The Hidden Pitfalls Investors Must Know
M
Moneycontrol•25-02-2026, 18:31
Online Bond Buying: The Hidden Pitfalls Investors Must Know
•Online bond buying is frictionless, but many investors get caught out due to differences in how bonds are marketed versus how they behave.
•Most online bonds are from the secondary market; always check 'yield to maturity' as the price paid is rarely the face value, impacting actual returns.
•Bond prices fall when interest rates rise, affecting even those planning to hold till maturity; longer-term bonds carry higher risk.
•A high coupon often signals weaker finances or higher risk, not a gift; credit ratings can be slow to reflect true risk.
•Selling bonds online is harder than buying, as many corporate bonds have low liquidity, potentially forcing sales at a discount or long waits.
