SOVEREIGN GOLD BOND SCHEME
Sovereign Gold Bond scheme was lauched in year 2015 with a view to reduce the demand for physical gold. SGB are securities denominated in grams of gold. The bond is issued by RBI on behalf of the government. It can be purchased through banks (except small finance bank) and Stock holding Corporation of India Ltd. (SHCIL), designated post offices and NSE & BSE.
What is maturity period of Sovereign Gold Bond?
The Sovereign Gold Bond Comes with Maturity period of Eight
Years. However there is an exit option after 5 years. The SGB can be traded in
stock market after five year in demat form.
What is the benefit of Sovereign Gold Bond?
The SGB is an alternative to the physical Gold. It gives you
the ongoing market value of the gold at the time of redemption along with the
interest @2.5% per annum. No making charges and compromise in purity in case of
SGB.
The bonds are issued in denomination of one gram of gold and
a maximum of 4kg gold can be held by a single individual. The interest earned
on the bond is taxable, however the capital gain is non-taxable after giving
the benefit of indexation.
If you want to purchase it, you can also purchase it from
your SBI Internet banking, whenever the issue is opened. First register for it
with your personal and PAN details and then proceed to purchase it online.
If you are looking for investment in gold for long term,
then SGB is a good option, since during the lock-in of 8 years, the price of
gold will appreciate as clear from the past trends and the interest is also
received alongwith. The SGB issues are usually announced through a press
release by government in every two or
three months. The first release of 2022 was open from 10th -14th
January 2022. Next issue is expected in April 2022.
Investors can also use this bond as collateral for loans.
Also the scheme has a provision for nomination.
You can also check out our article on Physical Gold vs GoldETF and 5 best investment options for diversified portfolio.
Disclaimer:
This article is intended for
informational purposes only, and should not be considered financial advice. You
should consult a financial professional before making any major financial
decisions.
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