Sovereign Gold Bonds – Should You Invest?

We Indians have a fascination for Gold. In 2019-2020 we imported Gold worth $28.2 billion. That’s the 2nd largest item in our Import Bill, behind Crude Oil.

During this year’s festive season, despite the economic pain and all-time high prices, jewelers across the country saw good demand for Gold.

The thing in India is that we don’t buy Gold just for ornaments. We mostly buy it as an Investment and for leaving behind an inheritance.

We as a country may not give up on Gold anytime soon but we can at least look at our smarter and efficient ways to invest in Gold.

Sovereign Gold Bonds (SGB) are an interesting alternative to buying physical Gold. What makes them interesting?

1. Issued by RBI, guaranteed by Government of India – Thus, NO DEFAULT RISK.

2. One unit = 1 gram of gold. Bonds will be issued and redeemed at the prevalent market price of Gold at the time of issue and redemption respectively.

3. Tenure of the bonds is 8 years. However, bonds will be listed on the stock market which will provide opportunity for early exits. Early redemption is available from 6th year onward.

4. Plus, you can earn >20% higher return as compared to physical gold. Not kidding!

Click on the link below to read our analysis.

Sovereign Gold Bonds – Should you invest?

#Gold #Investments #SmartFinance #SGB

This is not a recommendation. Please consult an advisor.