September 29, 2020

Understanding Bond Agreements-Engineering Graduates

Bond or Service Agreement is really important to understand before joining any company as a fresher. Almost every IT company in the industry would require you to sign a bond on stamp paper under which you would be asked to serve the company for certain years and on breaking the period certain amount needs to be paid to the company. Though bonds are illegal in the country, these service agreements exist because company spends lakhs of rupees to train a fresher and needs to retain that employee to get its money back, and so do an engineer need a guarantee employment for certain period of time.

Feasible Bond Terms:

Service agreement upto two years is something you should be comfortable with. But companies do come for 3 years, which is a long time! And you should think twice about signing for three years. And Money amounting to 75K-200K is seen, but not a penny above it is worth it! Always ask what if you break the bond to startups and ensure the amount is mentioned in written.

Bond paper Work:

Bond needs to be signed on the stamp paper by the employee, before joining the company. Some companies even emphasis on signing the bond before even receiving the offer letter, in that case ask each and every necessary detail regarding the company! Because once bond is signed, you are stuck for the mentioned years unless you pay the due amount. The amount sureity can be asked by giving them a signed blank check before joining the company or on a stamped sureity paper by your dear ones!

When should you break the bond:

Definitely, if you have received a better job offer which is kind of double to your pay package or a government  job! Whatever be the reason, calculate the risk analysis and don’t be that afraid of the bond, if you have a sure opportunity in front of you! But the best option remains to complete the tenure and then go after your dreams!

If you still have any doubt. Please write to us in the comment section. Our team would revert back within 24 hrs.

Do follow our Facebook page

Engineerdiaries- Helping Engineering students since 2016

You can also read other blogs under #placementdiaries  here:


Engineer Diaries started with the need to bridge the huge gap in what we are taught vs what the industry demands. We are based in Delhi, India but our blog is for everyone, in and outside tech industry❤ Feel free to reach out to us at for any business/personal query.

View all posts by admin →

Leave a Reply