Happy Dhanteras 2020: Here's why investing in Sovereign Gold Bonds scheme is beneficial
New Delhi | Jagran Business Desk: With the arrival of Dhanteras in India, the central government had on Monday opened the eight series of Sovereign Gold Bond (SGB) Scheme 2020-21 for subscriptions. The subscriptions, which will close on November 13 (Friday), is a good opportunity for people buying gold and for that buying SGBs is a much better means of investment in gold.
The Finance Ministry has also decided to offer a discount of Rs 50 per gram to those applying and paying for the scheme online. The issue price of the scheme has been fixed at Rs 5,177 per gram and Rs 5,127 per gram for those applying online.
Investors who had invested in the first issue of Sovereign Gold Bonds in November 2015 have achieved a growth of around 93 per cent in the last five years. These bonds mature in eight years, but the investor has the option to exit after five years. If an investor is eyeing an exit before the lock-in period of 5 years, they can always get out of the bonds by selling it on stock exchanges. KYC documents such as Voter ID, Aadhaar card/PAN or TAN /Passport are needed for buying the SGB scheme.
Here are the benefits of investing in a Sovereign Gold Bond Scheme:
1. One special advantage of Sovereign Gold Bond is that it comes with a fixed interest rate of 2.50 per cent per annum on the initial investment amount. Interest is credited to the investor's bank account on a half-yearly basis.
2. You can buy sovereign gold bonds from the bank (except small finance bank and payment bank), stock holding corporation of India, scheduled post office and recognized stock exchange.
3. The price of Sovereign Gold Bond is linked to the price of gold of 999 purity.
4. By investing in Sovereign Gold Bonds, you can avoid the expense and risk of theft by keeping it in a locker.
5. The investors are convinced about the market price of gold at the time of maturity and the periodic interest.
6. By investing in SGB, you are free from issues such as making charges and purity with purchasing gold as a jewellery.
7. The sovereign gold bonds are tradable on exchanges.
8. Interest on SGB is taxable, but the tax on capital gains at the time of redemption of bonds is exempted for individuals.
9. SGB can be used as collateral for loans.
10. Sovereign Gold Bonds are issued by the Reserve Bank of India on behalf of the Government of India. Therefore their sovereign is guaranteed.
Posted By: Talib Khan