Sovereign Gold Bonds
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What are Sovereign Gold Bonds?
Sovereign Gold Bonds (SGB) are government securities issued by the Reserve Bank of India (RBI) with a minimum investment of one gram of gold up to a maximum of 4kg of gold for individuals.
It is one of the best investment options in India, with a maturity period of eight years (RBI allows for early encashment after five years of issuance). SGBs are safe, low risk investment options that deliver competitive returns.
These securities eliminate the risk and cost of physically storing gold in bank lockers or at home. They deliver a semi-annual payment from the 2.5% coupon rate on the bond plus the capital appreciation depending on the market price of the gold at the time of maturity.
Tenure
8 Years
Annual return
2.5% (Fixed)
+ Variable returns from
gold appreciation
Why invest in
Sovereign Gold Bonds?
Government Issued
Issued by Government of India (RBI)
Convenient
No physical storage of gold required
Transferable
Can be transferred or gifted to friends & relatives
Loan Collateral
Can be used as collateral for loans from any financial Institutions
Tax Exemption
No long-term capital gains tax unless sold before maturity; periodic interest income taxed as per tax slab
Assured Returns
Fixed interest rate of 2.50% p.a on the initial investment plus returns from gold price appreciation at maturity
Risk Mitigation Factors
Zero to low risk, issued by RBI on behalf of Govt. of India.
No loss in gold units (grams)
Bonds held in Demat account
Regular monitoring of the gold bond market
Transparency maintained by RBI