The highest coupon rate for 20 years is 8.75 per cent, while the coupon rate for 15 years is 8.63 and 8.26 per cent for 10 years. These rates are for individuals.

For institutions and high networth institutions the coupon rates are 8.01, 8.38 and 8.50 per cent for 10 years, 15 years and 20 years.

Remember, these are tax free bonds, which means the interest earned is not added to total income for the purpose of computation of tax.

For individuals who are in the 20 per cent and 30 per cent tax bracket the yield works out to as high as 11.63 per cent (pre-tax), while for those in the 20 per cent tax bracket the return works to 10.50 per cent (pre-tax).

Now, let's assume you park money in a bank fixed deposit. If you receive 9.5 per cent and you are in the 20 per cent tax bracket your post tax returns would be just 7.6 per cent, while for those in the 30 per cent tax bracket, your post tax returns would be just 6.65 per cent.

Therefore, the IIFCL is offering better post tax returns to those in the 20 per cent and 30 per cent tax bracket. The tax free bonds from IIFCL would be listed on the exchanges, thus offering you an opportunity to sell.

However, liquidity is not too high and you may find it difficult to sell large quantities on the exchanges.

Also, if you make profits you are liable to pay capital gains tax. The company is a government owned entity and hence the chances of default on payment of interest and principal amount is minimal.

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