Investing in Sovereign Gold Bonds can prove to be a very profitable deal, know 3 major reasons

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SGBs have a maturity of 8 years. By investing in this bond, you get an increase in the price of gold in eight years, plus additional interest of 2.5 per cent annually. (PC Pexels)



The new series of Sovereign Gold Bonds (SGBs) opened for subscription from Monday. This is the fifth series of SGBs in the current financial year. RBI has fixed a price of Rs 5,334 per gram for the current series. In such a situation, if you are thinking of investing in gold, then you can prefer to invest in this bond than buying physical gold. There are many reasons for this. In this case, let us know what reasons you should invest in SGBs and how it can prove to be a profitable deal for you.


No fear of theft or fraud: If you are going to buy expensive jewellery with the goal of investment, then there are always two types of fear in your mind. First of all, you have to worry about the safety of jewellery. You have to get a locker for that. Second, you have doubts about the quality of the jewellery. At the same time, in gold bonds, you do not have to worry about the quality because in this bond you get a guarantee from the government and the Reserve Bank will fix the issue price based on 999 quality i.e. 24-carat gold price. is. Therefore, you can rest assured about the safety and quality of gold.

There is no expense on storage: If you buy physical gold, you open a locker in the bank to keep it. For this, you have to pay a fee every year. At the same time, SGBs are electronic securities so you do not have to spend any kind to keep them.

Know how much returns you get: SGBs have a maturity of 8 years. By investing in this bond, you get an increase in the price of gold in eight years, plus additional interest of 2.5 per cent per annum. This is one of the highlights of this bond. Tax is payable on the interest earned on the investment of 2.5 per cent on the gold bond income every year, but no tax is payable on the capital gains received when the SGBs are matured. On the other hand, if the investor wants to sell his holding even after five years, he gets the benefit of tax exemption on capital gains.

It is noteworthy that in April this year, the Reserve Bank announced that it will launch six series of sovereign gold bonds from April to September. Under the current series, you can invest in gold bonds till August 7, 2020. Under this scheme, a person can buy gold bonds of minimum one gram and a maximum of four kilograms in a financial year.