A lot of debt that is held by individuals is in the form of deposits and bonds. Deposits include fixed deposits with banks and company fixed deposits. Many people adopt that Government of India bonds route. There are also several debt options in the small savings basket-like monthly income scheme of the post office and National Savings Certificates. Then there are also bonds and debentures that are issued by companies. All these are direct methods of investing in debt.
There is also the route of going through mutual funds for debt investments. This widens the scope of the investment and the opportunities available for the investors because it brings into play the choice of instruments like floating rate bonds and short-term schemes and even government securities. All these options would not be present had one gone and adopted just the direct route for investments.