A benchmark bond is a debt instrument issued by the central government and has a residual maturity of 10 years. The bond provides a standard against which the performance of other bonds can be measured. The coupon on this bond is set through auction. As this bond is benchmark security so it have a highest liquidity and traders trades more in this security. This bond is safe and liquid in nature because it have a sovereign guarantee. At the maturity of one benchmark sovereign bond, another one with the same residual maturity is issued by the Central government. Currently, in India we have 7.26%-2032 bond as a benchmark government bond.