Compare interest rates

Different public sector entities (Government companies) offer different interest rates for tax-free bonds. The returns also differ for different projects. It is better to check, compare and choose the higher ones for the same tenure (investment duration).

Beware of Ponzi Schemes

For any tax-free bond, the purpose of the investment will be clearly stated in the information document. If no purpose is given for an investment, that might be a fraud!

Beware of fraud Ponzi schemes. Read more here.

Tenure

Investment in Tax-free bonds is for a very long term. Make sure you are not putting all your money in tax-free bonds. Keep an adequate amount of money in shorter-term deposits as well. 

• Short-term – six to twelve months
• Medium-term – More than a year to five years
• Long-term – More than five years to ten years

Not for emergencies

Keep some amount of your savings in your savings bank account for emergencies. Don’t put all your savings into investments.

Premature withdrawal

Make sure you do not withdraw your tax-free bonds before maturity. Premature withdrawal might sometimes not be allowed or have a penalty.

Nomination

Make sure you enter the nomination details correctly while applying for tax-free bonds. This ensures that your invested money goes to the right person in case of death.