Your Questions Answered: How can I invest in corporate bonds using the RFQ platform?

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Vidyanathan K. T, Salem, Tamil Nadu The Securities and Exchange Board of India (SEBI) launched the Request for Quote (RFQ) platform in 2020 to provide a transparent and efficient way for investors to trade in corporate bonds. The RFQ platform allows investors to request quotes from multiple dealers for a particular bond, and then choose the best offer.

Regular income: Corporate bonds typically pay a fixed interest rate at regular intervals, such as semi-annually or annually. This can provide investors with a steady stream of income. Diversification: Corporate bonds can help to diversify an investment portfolio.

This can help to reduce risk and improve overall returns. Potential for capital appreciation: The price of corporate bonds can fluctuate over time, just like the stock market. However, if an investor holds a bond until maturity, they will receive the full face value of the bond, plus any accrued interest.

This can lead to capital appreciation, especially if the company's credit rating improves over time. Liquidity: Corporate bonds are generally more liquid than other fixed-income investments, such as government bonds or certificates of deposit. This means that investors can typically sell their bonds quickly and easily if they need to.

Credit risk: Corporate bonds are subject to credit risk, which is the risk that the issuer of the bond will default on their debt. This risk can be mitigated by investing in bonds issued by companies with high credit ratings. Interest rate risk: The price of corporate bonds can be affected by changes in interest rates.