Ultra Short Term Bonds - Maturity within 1 Year

Most listings here are corporate NCDs, PSU bonds, and a few bank bonds that are now in the last leg of their original tenure. The short window keeps the bond's price relatively stable and the wait for the principal short.

What are Ultra Short-Term Bonds Maturing within a Year?

Ultra Short-Term Bonds Maturing within a Year are listed debt securities where the residual maturity (the time left till the bond matures) is 12 months or less. The category covers corporate NCDs, PSU bonds, government securities, and select bank bonds with short remaining tenure.

When you buy one, you are lending money to the issuer for that short period. The issuer pays the coupon (monthly, quarterly, or yearly depending on the bond) and returns your principal on the maturity date. These are sometimes called 12-month tenure bonds when investors are searching for this profile.

Why Investors Pick a Sub- 1-Year Window

A short window has a few practical uses:

1. Short-term cash parking. If you have a known cash need coming up in less than a year (a tax payment, a planned EMI prepayment, an academic fee), the bond's maturity can be lined up with the date.
2. Waiting for a better entry. Some investors stay in fixed income for a few months while waiting for a different opportunity to come up.
3. A treasury bill alternative for retail. T-bills are issued by the central government in 91-day, 182-day, and 364-day tenures. Listed corporate bonds with 12-month residual maturity sit in a similar tenure bucket.

Current Yields on Ultra Short-Term Bonds Maturing within a Year On GoldenPi

Today, this collection covers a wide rating band, from PSU AAA paper to corporate A paper. Yields run accordingly. Here’s a snapshot of a few:

The list rotates as new bonds get added and existing ones close.

A Simple Example

Suppose you invest Rs. 10,000 in a 9-month bond with a 9% annual coupon, paid quarterly. Annual interest works out to Rs. 900. Spread across the period, you receive roughly Rs. 225 each quarter. After 9 months, when the bond matures, you get back Rs. 10,000 plus the last coupon payment.

Risks to Understand

A short maturity does not remove all risks. Three to keep in mind:

1. Credit risk. The issuer's financial health can change even over a short period. A bond rated A carries more credit risk than a bond rated AAA, and the yield difference reflects that.
2. Liquidity risk. The secondary market for some short-residual bonds can be thin. Exiting before maturity may not happen at the price you want.
3. Reinvestment risk. After maturity, the rate available in the market may be lower than the rate you locked in at issue. This is a normal feature of any short-maturity holding.

How to Invest in Ultra Short-Term Bonds on GoldenPi

GoldenPi is a SEBI-registered Online Bond Platform Provider. The steps to invest in 12-month tenure bonds:

1. Log in to your KYC-verified account.
2. Open the Bonds Maturing within a Year section.
3. Filter by rating, yield, payout frequency, or issuer.
4. Read the bond details and the offer document.
5. Pay through NEFT, RTGS or UPI from your bank account.
6. The bond enters your demat after settlement.

Taxation

Interest is taxed at your slab rate. TDS at 10% applies to listed corporate NCDs when annual interest from one issuer crosses Rs. 10,000 (Section 193 of the Income Tax Act).

For bonds sold within 12 months of purchase, capital gains are taxed at a slab rate. Beyond 12 months, the long-term capital gain on a listed bond is taxed at 12.5% without indexation under the Finance (No. 2) Act, 2024.

Since the residual maturity here is 12 months or less, a buy-and-hold strategy means any gain typically falls under the short-term bucket.

Conclusion:

Bonds Maturing within a Year suit investors who want a defined exit within 12 months. The category covers a wide range of issuers, from PSU AAA paper to lower-rated corporate paper, with yields that reflect the rating spread. Many investors use this segment for short-term cash parking, while others look at it as ultra-short-term corporate debt that pairs with planned cash outflows.

Short tenure keeps interest rate sensitivity low but does not remove credit risk. The rating, the offer document, and the issuer's recent financials still matter, even on a short-residual bond.

GoldenPi keeps the listings updated. Live ratings and yields reflect the latest disclosures from each issuer.

Top Ultra Short Term Bonds - Maturity within 1 Year