The Zero Default Risk of the G-Secs. offer one of the best reasons for investments in G-secs so that it enjoys the greatest amount of security possible. The other advantages of investing in G- Secs are:
Greater safety and lower volatility as compared to other financial instruments. Variations possible in the structure of instruments like Index linked Bonds, STRIPS Higher leverage available in case of borrowings against G-Secs. No TDS on interest payments Tax exemption for interest earned on G-Secs. up to Rs.3000/- over and above the limit of Rs.12000/- under Section 80L (as amended in the latest Budget). Greater diversification opportunitiesAdequate trading opportunities with continuing volatility expected in interest rates the world over
