Government Security Bonds are issued by RBI on behalf of Government of India and State governments in India. Government securities have always been considered as the best investment option for risk free investing.
Government Security bonds are ideal example of risk free investing. As these bonds are issued by Government themselves, it comes with sense of security
Government bonds are tradeable on an exchange. That's how they offer an additional scope of earning higher return in terms of capital gains. Since, the bond prices fluctuate either based on changing market interest rates or creditworthiness of the issuer or both. The investment scenario here, is more favourable, as compared to FD's. As these aren't tradeable on exchange in order to offer any additional gains.