Dhanteras and Diwali Investing: Why Bonds Deserve a Place in Your Portfolio
Introduction
Dhanteras falls on Friday, November 6, 2026, and Diwali on Sunday, November 8, when the NSE and BSE hold their Muhurat Trading session from 2:20 PM to 3:30 PM. For many families, this is the time to buy gold and plan their finances for the year ahead.
Gold is often held as a store of value, but it does not pay you anything while you hold it. Bonds can. They are designed to pay interest on fixed dates and return principal on a known schedule, subject to the issuer's ability to pay, which is why some investors use them for regular income. This guide explains how bonds work, how to invest in them, how to choose the right ones, and how they compare with gold, FDs and mutual funds.
Dhanteras, Diwali and the idea of wealth
Dhanteras, also called Dhantrayodashi, is observed on the thirteenth day of Krishna Paksha in the month of Kartik and opens the five-day Diwali festival. "Dhan" means wealth, and the day is associated with prosperity and new purchases. Puja timings differ by city, so check your local panchang.
The idea behind the tradition is to build wealth steadily and protect it. A balanced portfolio does the same: some assets to protect value, and some to generate regular income.
Why bonds this festive season
Bonds give you three things gold cannot: regular interest income, a known maturity date, and cash flows you can plan around. That makes them useful for goals with a date attached, such as school fees, a home down payment or retirement income.
Where interest rates stand
• RBI raised rates in October: On October 7, 2026, the RBI's Monetary Policy Committee raised the repo rate by 25 basis points to 5.50%, its first hike since February 2023, and changed its stance to calibrated tightening. The next policy meeting is on December 2 to 4, 2026.
• Bond yields have risen this year: The 10-year government bond yield started 2026 at around 6.6% and was around 7.4% in mid-October (SBI Research).
• What this means for you: Higher yields mean new buyers can lock in higher income than earlier in the year. But bond prices fall when yields rise, so existing bonds, especially long-dated ones, can lose value if rates keep climbing.
• Views differ on what comes next: SBI Research (Ecowrap, October 15, 2026) said the 10-year yield, then about 7.38%, could rise to 7.6%; this is a projection, not a certainty. Nobody can time rates reliably, which is why matching bonds to your goals matters more than predicting the market.
What bonds are and how they work
A bond is a loan you give to a government, a public sector body or a company. In return, the issuer pays you interest and repays your money on set terms. Listed bonds can be bought and sold on the exchange before maturity.
| Term | Meaning |
|---|---|
| Face value | The amount on which interest is calculated and principal is repaid |
| Coupon | The fixed interest rate the bond pays on its face value |
| Payment frequency | How often interest is paid: monthly, quarterly, half-yearly or yearly |
| Maturity | The date by which the principal is fully repaid; some bonds repay in instalments |
| Yield to maturity (YTM) | Your expected annual return if you buy at today's price and hold to maturity |
| Credit rating | An agency's opinion of how likely the issuer is to pay on time; AAA is the highest |
| Secured bond | A bond backed by specific assets charged in favour of a debenture trustee |
Price and yield move in opposite directions. If you buy a bond above its face value, your yield will be lower than its coupon; if you buy below face value, it will be higher. That is why you should always compare bonds on YTM, not just the coupon.
Types of bonds you can invest in
| Type | Issued by | Key features |
|---|---|---|
| Government securities (G-secs) and Treasury bills | Central government | Lowest credit risk; T-bills mature within a year; individuals can buy through RBI Retail Direct |
| State Development Loans (SDLs) | State governments | Government-backed, usually yielding a little more than central government bonds |
| PSU bonds | Public sector companies and financial institutions | Typically high-rated, with a range of maturities |
| Corporate bonds and NCDs | Companies and NBFCs | Higher coupons for higher credit risk; terms vary by series |
| State-guaranteed bonds | State-owned companies, backed by a state guarantee | Rated with credit enhancement (CE); the guarantee terms matter |
| Tax-free bonds | Older PSU issues | Interest is tax-free; available only in the secondary market |
Bonds vs FDs, gold and debt funds
| Bonds | Bank FDs | Gold | Debt mutual funds | |
|---|---|---|---|---|
| Income | Fixed coupons on set dates | Fixed interest | None (except SGBs) | No fixed income; returns depend on the portfolio |
| Return driver | Coupon and purchase price | Interest rate | Gold price | Portfolio yield and price changes |
| Safety net | Issuer's credit, security and rating | DICGC cover up to ₹5 lakh per bank | Physical asset | Portfolio diversification; no guarantee |
| Early exit | Sell on the exchange if there is a buyer | Premature withdrawal penalty | Sell to a jeweller or on the exchange | Redeem at NAV, possible exit load |
| Main risks | Credit, interest-rate, liquidity | Bank risk above ₹5 lakh | Price volatility | Credit and interest-rate risk |
No single option is best. Bonds work well when you want scheduled cash flows and are willing to check the issuer's credit quality.
How to invest in bonds: step by step
1. Complete KYC and open a demat account with NSDL or CDSL through a depository participant, if you don't already have one.
2. Choose where to buy Listed bonds are available through SEBI-registered Online Bond Platform Providers (OBPPs) and stockbrokers. Government securities and T-bills can also be bought directly through RBI Retail Direct.
3. Decide your goal and time frame Pick bonds whose maturity matches when you will need the money.
4. Shortlist by rating and issuer Read the latest rating rationale for the exact ISIN, not just the headline rating.
5. Compare yield to maturity and cash flows Check the price, accrued interest, interest dates and whether principal is repaid in one go or in instalments.
6. Place your order and confirm settlement The bonds are credited to your demat account after settlement, and interest is paid to the bank account linked to it.
7. Track your holdings Watch for rating changes, issuer announcements and record dates, and keep your bank and demat details up to date so payments are not missed.
How to choose the right bond
• Credit rating and rationale: a higher rating usually means lower risk and a lower yield. Read why the rating was given and what could change it.
• Yield to maturity: compare bonds on YTM at the current price, not on the coupon alone.
• Maturity and repayment schedule: check whether principal comes back at maturity or in instalments.
• Issuer's financials: look at profitability, borrowing levels and asset quality in the latest results.
• Security and seniority: know whether the bond is secured, the security cover and the trustee.
• Liquidity: listed bonds do not always trade actively, so be ready to hold to maturity.
• Call or put options: a call option lets the issuer repay early, which can cut your expected income.
• Ticket size: SEBI's circular SEBI/HO/DDHS/DDHS-PoD-1/P/CIR/2024/94 dated July 3, 2024 allowed listed debt securities issued on a private placement basis to have a face value of ₹10,000, down from ₹1 lakh, and a December 18, 2025 circular extended this to zero-coupon securities. It applies only to issues made after those dates, so older bonds may still have a face value of ₹1 lakh or more. Check the face value of each ISIN.
Bond strategies when rates are rising
• Match maturity to your goals: If you hold a bond to maturity, interim price swings matter far less.
• Build a ladder: Spread money across bonds maturing in different years, so that part of your portfolio comes back regularly and can be reinvested at prevailing rates.
• Balance short and long maturities: Shorter bonds are less sensitive to rate changes, while longer bonds lock in income for longer but carry more price risk.
• Diversify across issuers: Avoid putting a large share of your fixed-income money into a single lower-rated issuer.
• Don't chase the highest yield: A much higher yield usually signals higher credit risk.
How to invest your Diwali bonus
A Diwali bonus is a one-time sum, so it is worth planning before the festive spending begins.
Start with the amount you actually receive
A cash bonus is fully taxable as part of your salary at your slab rate, and your employer deducts TDS before paying it. A large bonus can also push part of your income into a higher slab, so plan with the amount credited to your account.
Points to consider
• Clear costly debt first: Credit card dues and expensive personal loans usually charge more interest than most investments can safely earn.
• Top up your emergency fund: Keep several months of essential expenses in options you can access quickly, such as a savings account, a sweep-in FD or a liquid fund.
• Set a festive budget: Decide in advance how much goes to gifts, shopping and the Dhanteras purchase.
• Invest the rest by goal: Match each part of the money to when you will need it.
• Check tax-saving options: If you file under the old tax regime, eligible tax-saving investments can reduce your taxable income; most of these deductions are not available under the new regime.
Options investors may consider for a Diwali bonus
| When you need the money | Options to consider | Why |
|---|---|---|
| Within a year | Savings account, FDs, liquid funds, Treasury bills | Capital safety and easy access matter most |
| In one to five years | Listed bonds and NCDs, G-secs, SDLs, PSU bonds, target maturity funds, FDs | Known cash flows and maturity dates that line up with the goal |
| In more than five years | Equity mutual funds through SIP or STP, longer-dated bonds, with gold or silver as a smaller part | More time to ride out market swings |
Why bonds suit a bonus
Bonds can be used for a lump sum. You can invest the whole amount at once, choose a maturity that matches a goal, and receive interest on fixed dates. If you have several goals, spread the money across bonds maturing in different years so that cash comes back as each goal arrives.
Other options: mutual funds
Some investors prefer a fund manager to pick and manage bonds or shares for them. AMFI data show that monthly SIP contributions reached a record ₹32,490 crore in September 2026. The table below describes common fund types and what they are generally used for; it is not a recommendation.
| Fund type | What it does | Generally used for |
|---|---|---|
| Liquid and overnight funds | Invest in very short-term debt | Parking money for days to a few months |
| Debt and target maturity funds | Hold a portfolio of bonds; target maturity funds mature on a set date | Goals one to five years away, without picking individual bonds |
| Hybrid and multi-asset funds | Mix equity, debt and, in multi-asset funds, gold or silver | Holding several asset classes in one fund |
| Equity funds | Invest mainly in shares | Goals more than five years away |
SEBI revised mutual fund categories through a circular dated February 26, 2026, so check a scheme's current category, riskometer and documents. Debt funds and individual bonds also differ on tax: gains on debt funds bought on or after April 1, 2023 are taxed at your slab rate, while listed bonds held for more than 12 months qualify for long-term capital gains treatment.
Buying gold this Dhanteras: a quick guide
If you plan to keep the tradition, a few points will help you buy well:
• Jewellery costs more than gold: You pay 3% GST on the gold and 5% GST on making charges, and making charges are rarely recovered when you sell. Hallmarking with a six-digit HUID is mandatory in notified districts, so check the BIS hallmark and verify the HUID on the BIS Care app.
• Regulated alternatives exist: Gold ETFs, gold mutual funds and Electronic Gold Receipts are regulated by SEBI and carry no making charges.
• Be careful with digital gold: On November 8, 2025, SEBI cautioned that digital gold sold on online platforms is outside its regulatory oversight.
• No new Sovereign Gold Bonds: No tranche has been issued since February 2024, and from April 1, 2026, SGBs bought on the exchange no longer get tax-free gains at maturity.
Gold is often held as a store of value, but it pays no regular income. Some investors combine a small gold holding with bonds for diversification and cash flow.
Key risks of bond investing
• Credit risk: the issuer may delay or default on interest or principal. Lower-rated bonds carry more of this risk.
• Interest-rate risk: when market yields rise, the prices of existing bonds fall, and longer bonds fall more.
• Liquidity risk: some listed bonds trade rarely, so selling early may mean accepting a lower price.
• Reinvestment risk: interest and principal received may have to be reinvested at lower rates.
• Call risk: if the issuer repays early, you may lose expected future interest.
• No deposit insurance: unlike bank FDs, bonds are not covered by DICGC insurance.
Tax snapshot
Tax rules change, and the Income-tax Act, 2025 took effect from April 1, 2026, so confirm your own position with a tax adviser. In general, for resident individuals before surcharge and cess:
| Investment | Long-term holding period | Long-term gains | Short-term gains | Income |
|---|---|---|---|---|
| Listed bonds and NCDs | More than 12 months | 12.5%, no indexation | Slab rate | Interest taxed at slab rate; TDS may apply |
| Government securities | More than 12 months | 12.5%, no indexation | Slab rate | Interest taxed at slab rate |
| Tax-free bonds | More than 12 months | 12.5%, no indexation | Slab rate | Interest exempt |
| Debt mutual funds (bought on or after April 1, 2023) | No long-term benefit | Slab rate | Slab rate | Dividends taxed at slab rate |
| Equity mutual funds | More than 12 months | 12.5% on gains above ₹1.25 lakh a year | 20% | Dividends taxed at slab rate |
| Physical and digital gold, gold fund of funds | More than 24 months | 12.5%, no indexation | Slab rate | None |
| Gold ETFs | More than 12 months | 12.5%, no indexation | Slab rate | None |
| Bank FDs | Not applicable | Not applicable | Not applicable | Interest taxed at slab rate; TDS may apply |
Investor checklist
| Check | What to verify |
|---|---|
| Goal and time frame | When you need the money, and a bond maturity that matches it |
| Exact ISIN | Coupon, maturity, face value, payment frequency and repayment schedule |
| Rating | Latest rating, outlook and rationale, plus any recent rating action |
| Yield and price | YTM at the current price, accrued interest and total cost |
| Issuer | Latest financial results and rating updates |
| Security | Whether the bond is secured, the security cover and the trustee |
| Liquidity | Trading activity, in case you need to sell early |
| Platform | That you are buying through a SEBI-registered OBPP, a broker or RBI Retail Direct |
| Tax | How interest and gains will be taxed for you |
Quick investor summary
• Keep the Dhanteras tradition, but plan your investments around goals.
• Use bonds for regular income and known maturity dates.
• Compare bonds on rating and YTM, and spread money across issuers and maturities.
Published By:
BondScanner, a SEBI-registered Online Bond Platform Provider (OBPP). Links to BondScanner's platform and app listings are for educational and informational discovery purposes only.
Disclaimer:
This blog is intended solely for educational and informational purposes. The instruments, issuer categories, yield ranges, and examples mentioned herein are illustrative and should not be construed as investment advice or recommendations. BondScanner is a SEBI-registered OBPP and does not provide personalised investment advice. Nothing in this article is a solicitation to buy or sell any security. Fixed and coupon returns described in this article do not constitute guaranteed or assured returns. Investments in debt securities are subject to market, credit, and default risks, including delay and/or default in payment. Investors must read all offer-related documents carefully before investing.
Sustvest Broking Pvt. Ltd. | SEBI Reg. No. INZ000320834
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