The bond market (also known as the credit, or fixed

income market) is a financial market where participants can issue new debt, known as the primary market, or buy and sell debt securities, known as the Secondary market, usually in the form of bonds. The primary goal of the bond market is to provide a mechanism for long term funding of public and private expenditures. References to the "bond market" usually refer to the government bond market, because of its size, liquidity, relative lack of credit risk and, therefore, sensitivity to interest rates.

 The environment in which the issuance and trading of

debt securities occurs. The bond market primarily includes government-issued securities and corporate debt securities, and facilitates the transfer of capital from savers to the issuers or organizations requiring capital for government projects, business expansions and ongoing operations.

 Most trading in the bond market occurs over-the-counter,

through organized electronic trading networks, and is composed of the primary market (through which debt securities are issued and sold by borrowers to lenders) and the secondary market (through which investors buy and sell previously issued debt securities amongst themselves). Although the stock market often commands more media attention, the bond market is actually many times bigger and is vital to the ongoing operation of the public and private sector.

 The international bond market is an investment market just like

the stock market, but there are some differences in the structure of these two markets. The usual trading of bonds occurs on the over the counter market, and not on the exchanges like stocks are. There are a few corporate bonds which are the exception, because these may be traded on the exchanges. Bonds are normally traded using networks, which are set up to utilize electronic trading. Unlike the stock market, whose physical location is on trading floors of exchanges, there is no physical marketplace for the bond market. Instead, computers and telephones are used to buy, sell, and trade bonds, including junk bonds and other types. The structure of the international bond market is all electronic.

 The international bond market offers a large number of

opportunities for investors. All portfolios should include a specific portfolio percentage that is invested in fixed income, which the international bond market can supply. Bonds can range from extremely low risk to extremely high risk, with risks at all levels in between. The international bond market, also called the global bond market, allows investors to diversify their portfolio, preserve their wealth, and see attractive returns on their investment. The structure of the international bond market means convenience when trading, because everything is done electronically. This market trades in a large number of bond types each day, and is separated into two distinct markets, the primary market and the secondary market. The stock market is small compared to the international bond market, even though the stock market is more well known to the public

 Government Securities Market (G-Sec Market): It

consists of central and state government securities. It means that, loans are being taken by the central and state government. It is also the most dominant category in the India debt market.
Bond Market: It consists of Financial Institutions bonds, Corporate bonds and debentures and Public Sector Units bonds. These bonds are issued to meet financial requirements at a fixed cost and hence remove uncertainty in financial costs.

 Government Securities

It is the Reserve Bank of India that issues Government Securities or G-Secs on behalf of the Government of India. These securities have a maturity period of 1 to 30 years. G-Secs offer fixed interest rate, where interests are payable semi-annually. For shorter term, there are Treasury Bills or T-Bills, which are issued by the RBI for 91 days, 182 days and 364 days.

 Corporate Bonds

These bonds come from PSUs and private corporations and are offered for an extensive range of tenures up to 15 years. There are also some perpetual bonds. Comparing to G-Secs, corporate bonds carry higher risks, which depend upon the corporation, the industry where the corporation is currently operating, the current market conditions, and the rating of the corporation. However, these bonds also give higher returns than the G-Secs.

 Certificate of Deposit

These are negotiable money market instruments. Certificate of Deposits (CDs), which usually offer higher returns than Bank term deposits, are issued in demat form and also as a Usance Promissory Notes. There are several institutions that can issue CDs. Banks can offer CDs which have maturity between 7 days and 1 year. CDs from financial institutions have maturity between 1 and 3 years. There are some agencies like ICRA, FITCH, CARE, CRISIL etc. that offer ratings of CDs. CDs are available in the denominations of ` 1 Lac and in multiple of that.

 Commercial Papers

There are short term securities with maturity of 7 to 365 days. CPs are issued by corporate entities at a discount to face value.