There is a risk of loss if the market price of gold falls below its cost price.The capital gain on the maturity amount of these bonds is completely tax exempt making them attractive for long-term investors.These bonds make for good market-linked gifts.The 2.5% interest makes this option attractive because unlike physical gold, investors earn a passive income on their gold, which is directly credited to the bondholders’ accounts.They are also able to save on the cost of storing physical gold as these bonds are in a digital form and are kept in an investor’s demat account.SGBs ensures the quality of gold is protected and investors are secured against risk. SGB is a good option for investors who wish to buy gold only for the purpose of investment.Investors who are not buying directly from the RBI, can buy the units from the secondary market i.e., from stock exchanges. Dematerialization can also be done post allotment.RBI then processes the dematerialization at their end and until when, the bonds are held in RBI’s books. Once purchased physically, investors can get these bonds credited to their demat accounts by making a specific request for it. Investors can either buy the bonds in physical, digital or dematerialized format.So, if you miss the last one announced, you can always wait for the next issue to be announced. It is important to note that the RBI brings new series of SGBs for sale in the market throughout the year.A discount of INR 50 per gram is offered to investors who purchase them digitally to promote buying SGBs online. These securities are made available via banks, brokers, post offices and online platforms. SGBs are issued by the RBI in different tranches during the financial year.The only document mandatory for the purchase of SGBs is a PAN card without which no investment in these bonds is permitted. ![]() Every individual purchase is restricted to a maximum of 4kgs per financial year and in case of a trust, it is restricted to 20kgs. SGBs are easy to buy and handle with a a term of eight years and an interest rate of 2.5% per annum paid on a half-yearly basis. The redemption price is also calculated on the latest base data from the same source. These closing prices are published by the India Bullion and Jewellers Association Limited (IBJAL). The cost is calculated by taking an average of closing prices of gold for the latest three working days preceding the subscription period. The gold in this bond is sold on a per unit basis such that every unit derives its value from underlying one gram gold with 999 purity. Sovereign gold bonds or SBGs are gold bonds issued by the Reserve Bank of India (RBI) on behalf of the Government of India.
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