Looks like there is some confusion over the term bonds.
Bonds is a generic term for all securities that pay a fixed rate of return. The term bonds means all debt mutual funds, listed and unlisted debentures (NCDs), bank fixed deposits, company fixed deposits, govt treasury bonds, etc or any other security that pays a defined interest rate paid at regular intervals and has a maturity date and maturity value.
You can buy bonds by buying them directly from issuers (bank FDs, Company FDs) or from a distributor or buy it on an exchange (there are NCDs that trade on NSE and BSE just like stocks) through your broker or you can also buy debt mutual funds.
sunilsurana:
How do we know when bonds are being issued?
Large issues are advertised just like IPOs so you can buy them just like IPOs but easiest way to buy bonds is to buy debt mutual funds.
anuprempatro:
How can we invest in Bond Index in Indian Market.
There is only one ETF that I know and that is LIQUIDBEE. This ETF invests in overnight call money instruments and returns on this instrument is close to call money rates typically 4-5% each year post tax. I think there is one other ETF but with very little liquidity last time I checked.
Best way to invest in bonds is to buy debt mutual funds. The index I used in my charts is a broad bond index. Debt mutual funds have their own benchmark index and they will generally try to match the performance of the index after fees. A debt mutual fund with low expense ratio purchased directly from mutual fund house will give you return closest to the benchmark.
Since interest rates are dropping in India, debt mutual funds will have tough time beating their benchmark unless they they cut their fees also proportionately.