Because money is locked up for a longer duration than bank fixed deposits, tax-free bonds reduce reinvestment hazards. After a one-year hiatus, tax-free bonds, a promising option for risk-averse investors, are likely to return to the market. Government-backed enterprises typically issue tax-free bonds to generate long-term finance for infrastructure projects. Credit agencies analyse the financial condition of the businesses issuing the bonds before rating them. Please contact the Myfirstcrore team if you are interested in investing in tax-free bonds in India.