Top NBFC Bonds in India (2025): Safe, High-Yield Investment Options

Consider NBFCs (Non-Banking Financial Companies) as specialised businesses in a busy market. They offer loans and financial services, similar to banks, but with greater flexibility. To grow their business, these NBFCs raise money by issuing bonds. When you buy these bonds, you are lending money to the NBFC and earning interest in return.

For investors seeking steady returns, NBFC bonds in India are becoming a popular investment option. They often offer higher interest rates than bank fixed deposits, making them attractive for fixed-income investors.

Among the many options available, the top 10 NBFC bonds in India stand out for their strong credit ratings, competitive yields, and reliability. Investing in these top-rated NBFC bonds can help you achieve a balance of safety, income, and diversification in your portfolio.

What are NBFC Bonds?

NBFC bonds are debt instruments issued by Non-Banking Financial Companies to raise capital for their lending and business operations. Unlike banks, NBFCs cannot accept demand deposits; however, they can accept term deposits if permitted by the RBI. To fuel their lending activities, they often turn to the bond market. For investors, these bonds typically offer higher interest rates than many bank deposits, but the returns depend on the NBFC’s credit rating and market conditions.

Key Features of NBFC Bonds:

• Issued by NBFCs, not traditional banks
• Interest rates are often higher than bank FDs
• Credit ratings vary (AAA, AA+, etc.)
• Can be listed or unlisted, secured or unsecured

Why Invest in NBFC Bonds?

Think of NBFC bonds as the preferred supplier contracts in a manufacturing chain. When you partner with a reliable supplier (NBFC), you get steady deliveries (interest payments) and, at maturity, your principal is returned. The higher the supplier’s reputation (credit rating), the more secure your contract.

Benefits

• Attractive yields (often 8-14%* for top-rated bonds)
• Regular income (monthly, quarterly, or annual payouts)
• Diversification beyond equities and traditional FDs
• Tax-saving options in select categories

Risks

• Credit risk: If the NBFC faces financial trouble, repayments may be delayed or defaulted
• Liquidity risk: Not all bonds are easily tradable in the secondary market
• Interest rate risk: Bond prices can fluctuate with changing interest rates

Bondbazaar makes this process seamless, offering a wide selection of over 10,000 bonds, real-time trading, and zero account opening or brokerage charges, helping investors buy and sell bonds with just a click.

Categories of NBFC Bonds

Much like a diversified business portfolio, NBFC bonds come in various types to suit different investment strategies:

• AAA Bonds: These are the safest, with minimal risk and steady returns.
• High-Yield Bonds: Offering returns above 11%, these bonds carry slightly higher risk but can boost portfolio income.
• Tax Saving Bonds: Holding these for over three years may provide indexation benefits, reducing taxable gains.
• Short-Term Bonds: Maturing in less than three years, suitable for those seeking quick liquidity.
• Long-Term Bonds: With tenures of five to ten years or more, these are ideal for long-term planning.
• Regular Income Bonds: Pay interest monthly, quarterly, or annually, supporting cash flow planning.

List of Top 10 NBFC Bonds in India for 2025

Here is a representative list of the top 10 NBFC bonds in India for investment in 2025. This list focuses on safety (AAA/AA+ ratings), issuer reputation, and long-term maturity, as per industry standards and available index data:

Notes:

• Yields are indicative and may vary depending on the issue and prevailing market conditions.
• These bonds are widely recognised for their safety, liquidity, and reliability, making them the standard "top 10" for conservative and mainstream investors.

This list of NBFC bonds reflects the industry’s definition of top NBFC bonds, prioritising high credit quality and strong issuer reputation over just high yield. Always check the latest series, yields, and terms before investing.

Benefits of Investing in NBFC Bonds

Let’s look at the advantages in a way most businesses can relate to: making the most of your working capital while keeping risks under control.

• Higher yields than fixed deposits, often 2% to 5%* more, helping businesses maximise returns on idle funds.
• Flexible payout options—monthly or cumulative—allow businesses to match income streams with their cash flow needs.
• Strong issuer credibility, with top-rated NBFCs such as Bajaj Finance, Tata Capital, and Shriram Finance offering AAA-rated bonds, providing greater confidence in their financial health.
• Tax efficiency through indexation# benefits are realised if the investment is held for over three years, thereby reducing capital gains tax liability.
• Regular interest payments and the safety of capital when investing in high-rated NBFC bonds.

#Indexation increases the purchase price of an asset to account for inflation, so when you sell the asset, your taxable profit is lower and you pay less tax.

How to Invest in NBFC Bonds in India?

Investing in NBFC bonds in India has become a straightforward process. Here’s a step-by-step overview:

1. Open an account on Bondbazaar, a trusted and SEBI-regulated bond investment platform.
2. Explore the extensive selection of over 10,000 bonds, including AAA-rated NBFC bonds, tax-saving bonds, and high-yield options.
3. Filter bonds based on credit rating, yield, tenure, and your investment goals to find the best fit for your cash flow and risk appetite.
4. Carefully review the bond details, including credit ratings and terms.
5. Invest securely online using Bondbazaar’s safe payment methods.
6. Monitor your portfolio in real time, with interest payments and principal credited directly to your demat and bank accounts.

Bondbazaar offers several advantages:

• No account opening or brokerage fees, making investing cost-effective.
• Instant buy and sell options for bonds, providing liquidity when you need it.
• Real-time trading on NSE and BSE, ensuring transparency and market access.
• Expert support and a user-friendly interface to guide your investment decisions.
• All investments are safely held in your demat account, eliminating middlemen and simplifying management.

This streamlined process makes Bondbazaar an ideal platform for businesses and investors looking to optimise returns from NBFC bonds with ease and confidence.

Conclusion 

NBFC bonds in India offer a great combination of high returns, safety, and portfolio diversification. Whether you want the security of AAA-rated bonds, the tax benefits of certain options, or the growth potential from up-and-coming NBFCs, there are plenty of choices available in 2025 to suit every type of investor.

Using Bondbazaar, you can easily explore a wide variety of NBFC bonds, trade with ease, and build a strong fixed-income portfolio for the future.

Before you invest, always check the credit ratings and maturity dates, and make sure the bonds match your risk tolerance. With a smart approach, NBFC bonds can become a key part of your investment plan in 2025 and beyond.