Product review: Axis Securities’ YIELD platform

To make investing in bonds and debentures easier, Axis Securities launched a new online platform ‘YIELD’ early this month. Customers of Axis Securities can use YIELD to buy and sell bonds in the secondary market.

What it is

YIELD enables customers of Axis Securities to invest in a range of corporate bonds (rated A and above) trading in the secondary market. The bonds purchased on the platform can also be sold here.

Today, when you buy / sell bonds through your trading account with a broker, the transaction goes through based on the volumes available on the stock exchanges. Axis Securities has empanelled large wealth management firms (that deal in bonds) on its platform. It is the inventory of bonds available for sale with these firms that is aggregated and displayed on the YIELD platform.

For each bond, YIELD shows you the face value, current price (‘minimum investment’), coupon rate, yield to maturity (‘yield’), maturity date, frequency of interest payment, among other details. You can also see whether the bond is tax-free or taxable and perpetual or not. The platform also shows you the stream of cash flows from a bond over its entire tenure. The periodic interest payments each year and the final maturity amount to be received in the end, are shown diagrammatically for each bond. YIELD also allows you to compare different bonds with each other as also with fixed deposits from a few select banks including SBI.

Suitability

While YIELD offers the prospect of better liquidity (larger volumes) that HNI bond investors may require, it may not offer any significant advantage to small retail investors who can, therefore, continue to trade with their existing brokers. YIELD gives Axis Securities’ customers access to bonds available with large wealth management firms (which is besides what is available on the exchanges) thereby providing them greater liquidity.

The platform also offers the advantage of one-time KYC (know your customer) to investors. According to Vamsi Krishna, Head- Products & Marketing, Axis Securities, once your KYC with Axis Securities is complete, all your purchases through YIELD are simply conducted based on that. You don’t require a separate KYC for bond transactions with every bond house. Existing customers of Axis Securities can use the platform at no additional cost. Note that, though, as on date, you can use YIELD to sell only those bonds that have been bought on the platform.

Furthermore, today, with the cheapest bond on the platform priced at around ₹2 lakh and many others at ₹10 lakh, per bond, the platform is not suited to the needs of small investors. Axis Securities plans to introduce bonds of smaller denominations in future. Retail investors can invest in tax-free and taxable bonds of significantly small denominations via their trading accounts with other brokerages as also with Axis Securities (outside of the YIELD platform).