The Sovereign Gold Bond( SGB) is a government-backed gold bond scheme that allows investors to invest in gold without having to buy physical gold. SGBs are issued by the Reserve Bank of India( RBI) on behalf of the Government of India.
SGBs are nominated in grams of gold, and the issue price is fixed and grounded on the average ending price of gold for the week antedating the subscription period. The minimal investment quantum is 1 gram, and the maximum investment quantum is 4 kilograms for individualities and 20 kilograms for Hindu concentrated Families( HUFs).
SGBs have a maturity period of 8 times, and investors can earn an interest of 2.5 per annum on their investment. The interest is paid semi-annually, and it’s taxable at the investor’s borderline income duty rate.
At the end of the maturity period, investors can redeem their SGBs for cash or gold. However, they will admit the gold at the prevailing request price, If they choose to redeem for gold.
SGBs are a good investment for those who want to invest in gold without having to buy physical gold. They’re also a good investment for those who want to diversify their portfolio and reduce threats.
These are some of the benefits of investing in SGBs: