What are the benefits of investing in risk-free instruments?

Investing in riskfree instruments offers several benefits for investors in India, including:

1. Preservation of capital: Riskfree investments protect your principal amount and ensure that your investment amount is safe.

2. Regular income: Many riskfree investments offer regular income in the form of interest payments, which can be an attractive option for those who require a regular income stream.

3. Liquidity: Many riskfree investments can be easily liquidated, providing access to cash in case of an emergency.

4. Diversification: Riskfree investments can help diversify your investment portfolio, reducing overall risk.

5. Tax benefits: Some riskfree investments such as taxfree bonds, PPF, and NSC offer tax benefits, helping to reduce your tax liability.

Overall, while riskfree investments may not offer the same high returns as riskier investments, they can provide stability, regular income, and protection of your principal amount.