11 golden reasons to invest in Sovereign Gold Bonds (SGBs) - know last date, allotment too

The subscription for the tenth tranche of the Sovereign Gold Bonds (SGBs) scheme, the 2020-21 Series X, has opened on January 11, 2021, and will close today (January 15, 2021). The SGBs allotment on January 19, 2021.  

Rahul Kamdar | Jan 15, 2021, 12:48 PM IST

The subscription for the tenth tranche of the Sovereign Gold Bonds (SGBs) scheme, the 2020-21 Series X, has opened on January 11, 2021, and will close today (January 15, 2021). The SGBs allotment on January 19, 2021.

 

1/6

Great Sovereign Gold Bonds (SGBs) scheme Opportunity

Great Sovereign Gold Bonds (SGBs) scheme Opportunity

Great Sovereign Gold Bonds (SGBs) scheme Opportunity

This is a great opportunity for you to invest in gold. SGBs are government securities denominated in grams of gold. These are substitutes for holding physical gold. SGBs are issued by the central bank on behalf of the Government of India. Investors have to pay the issue price in cash and the bonds are redeemed in cash on maturity.

 

2/6

Reasons for buying gold

Reasons for buying gold

Reasons for buying gold

There are many reasons for buying gold. The yellow metal acts as a hedge against inflation. It is a relatively stable investment compared to equities. It is a good diversification strategy. It can be purchased easily. You know all that. We now give you more reasons if you buy gold in the form of SGBs.

3/6

11 golden reasons to invest in Sovereign Gold Bonds (SGBs)

11 golden reasons to invest in Sovereign Gold Bonds (SGBs)

11 golden reasons to invest in Sovereign Gold Bonds (SGBs):
 
1) SGBs carry a fixed interest rate of 2.50% per annum on the amount of the initial investment. Interest is credited semi-annually to the bank account of the investor.

2) You can easily purchase SGBs online through Sharekhan and hold the bonds in demat form.

4/6

3) SGB prices are linked to the price of gold of 999 purity published by India Bullion & Jewellers Association (IBJA).

3) SGB prices are linked to the price of gold of 999 purity published by India Bullion & Jewellers Association (IBJA).

3) SGB prices are linked to the price of gold of 999 purity published by India Bullion & Jewellers Association (IBJA).

4) Investing in SGBs eliminates the risk of theft and the cost of storage.

5) Investors are assured of the market value of gold at the time of maturity and periodical interest.

5/6

6) SGBs are free from issues like making charges and purity associated with purchase of gold in jewellery form.

6) SGBs are free from issues like making charges and purity associated with purchase of gold in jewellery form.

6) SGBs are free from issues like making charges and purity associated with purchase of gold in jewellery form.

7) These bonds are tradeable on Exchanges.

8) SGBs have a tenure of eight years; early encashment/redemption of the bonds is allowed after the fifth year.

6/6

9) Interest on SGBs is taxable but the capital gains tax arising on redemption of the bonds is exempted for individuals.

9) Interest on SGBs is taxable but the capital gains tax arising on redemption of the bonds is exempted for individuals.

9) Interest on SGBs is taxable but the capital gains tax arising on redemption of the bonds is exempted for individuals.
10) SGBs can be used as collateral for loans.
11) Sovereign gold bonds carry the sovereign guarantee as these are issued by the Reserve Bank of India on behalf of the Government of India.