One of the reasons people prefer to purchase Government Bonds are because they are considered as risk free since the bond is issued by the government of India
Liquidity – Investors need not worry when they invest in govt bonds as Government Bonds are easily tradable in the secondary markets.
While Government Bonds are high in safety they are low in returns when compared to Bank and High Yield Bonds. However, investors prefer to invest in Govt bonds as they have the highest degree of safety where the principal is guaranteed.
Government Bonds do not have any tax deducted at source
Government Bonds have no lock in period in comparison with Bonds like RBI Savings Bonds
These bonds are held safely in your Demat account
The tenure of these bonds range from 2 years to about 40 years.
While the Government Bonds interest rate is usually lesser in comparison to other bond types it makes up for it with assured returns and stability as they are a risk free investment