Investment in Bonds in India
The Indian bond Market is not mature enough as that of world bond market. The Government, Public Sector Units (PSUs) & the private corporations issue bonds in India. Thus, Indian Bonds are basically of 3 types.
01) Government Bonds (Like RBI 8% Savings Taxable Bonds)
02) Public Sector Units Bonds (Like NABARD)
02) Corporate Bonds (Commercial Papers of Private Companies)
However, as a retail investor you can not invest directly in the Corporate bonds in India because they require higher minimum investments. The only way to invest in Corporate Bonds is via Debt Mutual Funds. Your Mutual Fund is an Institutional investor and it can invest in corporate bonds any time on behalf of you.
However, you can anytime invest in PSU & Government Bonds as a retail investors. The Indian Bonds will give you 8-12% annual return which is really excellent in comparison to the US Bond Market which has just 3-4% Yield.
So what I advise you is that, if you invest in the Indian Bond market than Invest via Debt Mutual Funds. This is the only best and convenient way to invest in the Indian Bonds.