Remember, you can hold your bond in demat form or in the form of physical certificates. If you hold in demat format then it will be in your demat account with a unique ISIN number. It depends upon the convenience of investor whether one wants to open a separate account for debt instruments. Demat has no restriction if existing account or multiple accounts are used for dematerialisation of debt instruments. Procedure for dematerialisation of debt instrument is the same as that carried out for equity shares. In order to dematerialise his/her certificates; an investor will have to first open an account with a DP and then request for the dematerialisation of certificates by filling up a dematerialisation request form [DRF], which is available with DP and submitting the same along with the physical certificates. The investor has to ensure that before the certificates are handed over to the DP for demat, he marks "submitted for dematerialisation" on the face of the certificates. What about interest on the bonds? Payment of interest is handled in the same way as a corporate benefit like dividend in equity. Like in the case of equity holdings, the list of beneficiary holders as on book closure date consisting of Holder Name and account number, address, bank details, and DP ID is downloaded to the Issuer. Based on the information provided above, the issuer despatches interest warrants to the holders of dematerialised instruments. Alternatively, if you have opted for direct credit of interest by ECS transfer, then you can receive the interest amount directly into your designated bank account which is mapped to your demat account.