What are Sovereign Gold Bond (SGB) ?
Sovereign Gold Bond (SGB) is an excellent option for individuals looking to invest in gold while minimizing some of the risks associated with physical gold ownership. Here's a breakdown of its key features and potential benefits:
What is a Sovereign
Gold Bond (SGB)?
· An Sovereign Gold Bond is a government-backed bond issued by the
Reserve Bank of India (RBI) in denominations of grams of gold.
· Investors pay the
issue price in cash and receive the equivalent amount of gold in units at
maturity.
· The redemption price
is based on the simple average of closing price of gold of 999 purity of
previous 3 working days published by IBJA.
Benefits of Investing
in SGBs:
· Safety: Backed by the
Government of India, ensuring minimum risk compared to physical gold.
· Eliminates Storage Costs: No need to worry about safekeeping physical gold or
associated costs.
· Earn Interest: Regular interest payments (currently 2.5%) are credited
semi-annually.
· Tax Benefits: Capital gains tax exemption upon maturity if held till maturity.
· Liquidity: Exit options
after 5th year on interest payment dates.
