Sovereign Gold Bonds are government securities denominated in multiple gram(s) of gold. They are substitute of physical gold. These are issued by Reserve Bank of India on behalf of the Government of India. Investors have to pay the issue price in cash and the bonds will be redeemed in cash on maturity. They are also traded in the stock exchange. They mirror the price of physical gold.
The subscription for the Sovereign Gold Bond will be open as per the following calendar. The rate of the circulated scheme will be declared by RBI before every new subscription by issuing a Press Release. The Sovereign Gold Bonds are denominated in multiples of gram(s) of gold with a single unit of 1 gram.
Subscription Period: August 22, 2022 to August 26, 2022
Issue Date: August 30, 2022
There can be several reasons for investing in Sovereign Gold Bonds.
Sovereign Gold Bonds are safe investment since they are backed by Government of India.
The risk averse investors will find this option very favorable.
Physical gold involves making charges but SGB avoids that making buying and selling gold as investment easy to trade.
Gold shall always remain a valuable commodity and thereby it will always give assured redemption in market value.
There are periodic Interest Payments made at 2.5% per annum.
These are taxable at normal tax slab rates.
Many might wonder whether Sovereign Gold Bonds are Investment worthy?
Sovereign Gold Bonds save upto 15% on making & wastage Charges giving a strong reason for pursuing such an investment option. They save tax on Capital Gain at maturity. They carry 0% Credit Risk, 0% Storage Cost. Don’t worry if you missed your chance - Buy SGBs from the secondary market. There is no lock-in period of 5 years. It requires a trading and demat account.
Some highlights of SGB are an 8-year tenor with an option to redeem early after the fifth year from the date of issue. (Only on interest payout dates). There is a fixed interest of 2.5% pa on investment value.
Discount of Rs 50/gram
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