Bharat Bond ETFs: 7 Things to Know About Bharat Bond ETF

03 May 2021|

2 min read |

by ICICI Securities Team

Cautious investors are always on the lookout for safe investment avenues. Among the best options are bank fixed deposits and public sector bonds. Public sector bonds are attractive for their safety, since they have government backing and decent returns. However, they are not particularly accessible to retail investors and lack liquidity because of long tenures.

Bharat Bond ETF (exchange traded fund) could be just what the cautious retail investor needed. They offer decent returns, safety -- and since they are traded on the exchange -- quite liquid as well. Bharat Bond ETF is basically a mutual fund for public sector bonds.

What you need to know about Bharat Bond ETF

Bharat Bond ETF invests in bonds (AAA rated) of public sector entities. It has been initiated by the government and managed under the supervision of Edelweiss Asset Management Company (AMC). The fund will hold the bonds till maturity. There are four different fixed maturity time periods of 2 years to 10 years (the maturity for the Bharat Bond issue will happen in 2023, 2025, 2030 and 2031)
Bharat Bond is ideal for conservative investors, who will get tax-efficient returns compared to fixed deposit schemes of banks. It has a bond-like structure with fixed maturity, providing predictable and stable returns at maturity
Another advantage of Bharat Bond ETF is that the minimum investment amount is as low as Rs. 1,000; you can invest in multiples of Rs. 1 thereafter. This brings it within the reach of small retail investors, who will get the benefit of a safe investment avenue involving low risk
It’s highly transparent with regular disclosure of the portfolio along with live NAVs (Net Asset Values). Bharat Bond ETF tracks the performance of the Nifty Bharat Bond Index and invests in high-quality AAA rated Public Sector Bonds
The expected portfolio yield for the Bharat Bond ETF 2025 is around 5.75%, while the expected returns for the 10-year Bharat Bond ETF 2031 is around 6.75% as of 21 Apr 2021.
There is no lock-in period. You can sell your units like you buy/ sell your shares through your trading & demat account. Thus, it offers significant liquidity to you as an investor. The expense ratio of the bond is also low, at 0.0005%
Bharat Bond ETF has an advantage over bank fixed deposits as the taxation for Bharat Bonds ETF is similar as that on debt mutual funds. If you hold these bonds for over three years, you will have to pay long-term capital gains (LTCG) tax at 20 percent with indexation. That is, the purchase price will be adjusted for inflation, reducing your capital gains, and thus the tax that you pay. In comparison, your interest income on bank fixed deposits will attract marginal rate of tax (can be 30% if you are in highest bracket)

FAQs on Bharat Bond ETF

What is Bharat Bond ETF?

Bharat Bond ETF is a type of mutual fund that invests in government bonds. It's like a basket holding several bonds from companies owned by the Indian government. The benefit is you get exposure to a variety of bonds in one shot, and it matures on a specific date, returning your money with gains.

How do Bharat Bond ETFs Work?

Bharat Bond ETFs are like bundles of government bonds that mature on a set date. They track an index, passively buying these bonds and holding them till maturity. This gives you steady returns and predictable income, similar to a fixed deposit.

Who can buy Bharat bonds that are based on ETFs?

Anyone in India can buy Bharat Bond ETFs! This includes regular citizens, those living abroad (NRIs), and even businesses. All you need is a Demat account for direct purchase, or you can invest through mutual funds that don't require one.

What are the objectives behind introducing Bharat bond ETFs?

Bharat Bond ETFs aim to make government bonds more accessible. They offer regular investors a safe and easy way to invest in a basket of these bonds, providing predictable returns and liquidity through exchange trading. This also helps government companies raise funds efficiently.

What is the minimum investment amount of Bharat bond ETFs?

The minimum investment for Bharat Bond ETFs is investor-friendly! It typically starts around ₹1000 (one thousand rupees). This makes it easier to start investing and gradually build your holding over time.

Do Bharat bond ETFs come with a lock-in period?

Bharat Bond ETFs offer flexibility! Unlike some investments, they don't lock your money in. You can buy and sell them on the stock exchange just like any stock, allowing you to exit your investment whenever needed.

Disclaimer

ICICI Securities Limited has its registered office at ICICI Venture House, Appasaheb Marathe Marg, Prabhadevi, Mumbai - 400025, India, Tel No:- 022 - 2288 2460, 022 - 2288 2470. The non-broking products / services like iLearn and Financial Learning are not exchange traded products / services and ICICI Securities Ltd. is just acting as a distributor/ referral Agent of such products / services and all disputes with respect to the distribution activity would not have access to Exchange investor redressal or Arbitration mechanism. iLearn is not an exchange traded product/service of ICICI Securities Ltd. All disputes with respect to the activity on the platform would not have access to Exchange investor redressal or Arbitration mechanism.

ICICI Securities Ltd. is a Member of National Stock Exchange of India Ltd (Member Code :07730), BSE Ltd (Member Code :103) and Member of Multi Commodity Exchange of India Ltd. (Member Code: 56250) and having SEBI registration no. INZ000183631. ICICI Securities Ltd. is a SEBI registered with SEBI as a Research Analyst vide registration no. INH000000990. Name of the Compliance officer (broking): Mr. Atul Agrawal, Contact number: 022-69997051, E-mail address: complianceofficer@icicisecurities.com Investments in securities markets are subject to market risks, read all the related documents carefully before investing. The contents herein above shall not be considered as an invitation or persuasion to trade or invest. ICICI Securities Ltd. and affiliates accept no liabilities for any loss or damage of any kind arising out of any actions taken in reliance thereon. Such representations are not indicative of future results. The securities quoted are exemplary and are not recommendatory. AMFI Regn. No.: ARN-0845. PFRDA registration numbers: POP no -05092018. ICICI Securities Ltd. acts as a Composite Corporate agent having registration number -CA0113. Mutual Fund Investments are subject to market risks, read all scheme related documents carefully. Please note, Mutual Fund, Corporate Fixed Deposits, Bonds, Alternate investment funds, Tax planning, Succession planning, NPS, IPO, Investment Advisory and Loans related services are not Exchange traded products and ICICI Securities Ltd. is acting as a distributor to solicit these products. Please note, Insurance related services are not Exchange traded products and ICICI Securities Ltd. is acting as a corporate agent to solicit these products. All disputes with respect to the distribution activity, would not have access to Exchange investor redressal forum or Arbitration mechanism. The non-broking products / services like Research, etc. are not exchange traded products / services and all disputes with respect to such activities would not have access to Exchange investor redressal or Arbitration mechanism. The contents herein above are solely for informational purpose and may not be used or considered as an offer document or solicitation of offer to buy or sell or subscribe for securities or other financial instruments or any other product. Investors should consult their financial advisers whether the product is suitable for them before taking any decision. The contents herein mentioned are solely for informational and educational purpose.

Did you enjoy this article?

61 people liked this article. Share Feedback

Recent Articles

View all

Understanding Contango in Commodity Markets

Understand contango in commodity trading, how futures prices differ from spot prices, and how financing, storage and insurance costs influence commodity pricing.

166 views

1 minutes

19 Oct 2026

Know Your Commodity Before You Trade: Copper

Copper is a widely used base metal known for its electrical and thermal conductivity, strength, ductility and corrosion resistance. It is used across electrical wiring, construction, machinery, power infrastructure and several industrial applications.

381 views

2 minutes

09 Oct 2026

Know your commodity before you trade - Natural Gas

Natural Gas is a widely traded energy commodity used for electricity generation, industrial activity, heating and other applications. Its prices can react sharply to weather, supply and demand, inventories, global energy markets and geopolitical developments.

647 views

1 minutes

30 Sep 2026