Corporate Secured Bonds 2026: Income-focused investors looking for higher fixed returns than bank FDs are increasingly exploring secured corporate bonds. With annual yields going up to 9 percent in selected issues, these bonds are attracting moderate-risk investors who want better income without shifting fully into equity markets. Unlike unsecured debentures, secured bonds are backed by company assets, offering an additional safety layer along with predictable coupon income.
Interest Rate And Tenure Structure
Corporate secured bonds in 2026 are expected to offer fixed coupon rates between 8.00 percent to 9.00 percent depending on company rating, tenure, and market conditions. Tenure generally ranges from 2 years to 7 years depending on bond issue. Interest payout may be monthly, quarterly, semi-annual, or cumulative based on investor selection. Higher coupon rates are usually offered for longer lock-in periods.
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Asset-Backed Security And Risk Factor
Secured bonds are backed by specific company assets such as receivables, property, or infrastructure holdings. In case of default, secured bondholders get repayment priority over unsecured creditors. However, credit risk still exists depending on the financial health and credit rating of the issuing company. Investors should always check credit ratings like AAA, AA+, or AA before investing.
Taxation And Liquidity Conditions
Interest earned from corporate secured bonds is taxable as per investor income tax slab. TDS may apply depending on bond structure and holding method. Some bonds are listed on stock exchanges, allowing early exit before maturity, but liquidity depends on trading volume and market demand. If sold before maturity, capital gains tax rules apply based on holding period.
Investment Process And Documentation
Corporate secured bonds are usually available through primary public issues, private placements, or stock brokers in demat form. KYC documents including Aadhaar, PAN, and demat account linkage are required. Minimum investment amount may start from ₹10,000 to ₹1 lakh depending on issue terms. Investors should evaluate credit rating, asset coverage ratio, and company financial performance before investing.
Annual Income And Yield Example
For example, investing ₹5 lakh at 9 percent annual coupon may generate ₹45,000 yearly income before tax. Over 5 years, total interest income may reach around ₹2.25 lakh excluding reinvestment benefit. Compared to bank FD at 7 percent, secured bonds offer higher yield but carry moderate credit risk. This makes them suitable for investors who understand risk-return balance and diversify across issuers.
Disclaimer: Final coupon rate, asset backing details, credit rating, taxation rules, and liquidity conditions depend on specific bond issue and regulatory guidelines. Investors should review official offer documents and credit ratings before making investment decisions.