Monday, July 18, 2016

Sovereign Gold Bonds.... Traditional Gold goes Digital

Ever wondered how to Invest Wisely & Earn Safely?
Today In our LEARN B4 YOU EARN segment, We discuss about  "Sovereign Gold Bonds" (SGB);
a smart way to Invest in Gold and earn 2.75% p.a. interest paid every 6 months

Sovereign Gold Bonds
are government securities
issued by Reserve Bank of India on behalf of the Government of India. They are denominated in grams
of gold and can be purchased instead of physical gold.

can buy these bonds
through BSE at issue price when RBI announces
a fresh sale or they can purchase it immediately through BSE at current price like any other security.

can redeem these bonds
for cash upon maturity of the bonds
or can sell it on BSE at current prices.

Key Features

  • The bonds bear interest at the rate of 2.75 per cent (fixed rate) per annum on the amount of initial investment. Interest will be credited semi-annually to the bank account of the investor and the last interest will be payable on maturity along with the principal.
  • The bonds will be available both in demat and paper form.
  • The tenor of the bond is for a minimum of 8 years with option to exit in 5th, 6th and 7th years.
  • The bonds will carry sovereign guarantee both on the capital invested and the interest.
  • The bonds can be used as collateral for loans.
  • No STT or Capital Gains Tax (as per Government of India guidelines)

Advantages of Sovereign Gold Bonds

  • Superior alternative to holding gold in physical form.
  • Risks and costs of storage are eliminated. Investors are assured of the market value of gold at the time of maturity and periodical interest.
  • No issues like making charges and purity in the case of gold in jewellery form.
  • Held in the books of the RBI or in demat form eliminating risk of loss of scrip etc.
source :bseindia

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