8 Advantages Of Investing In Sovereign Gold Bonds

Sovereign Gold Bonds are essentially government securities denominated in grams of gold.

Lower Cost

The government sets the price of gold bonds slightly lower than the market price of gold, usually ₹50  lower than the price of 1 gram of gold, so you can get a larger quantity of gold bonds compared to physical gold at the same price.

Convenience Of Buying

Buying gold bonds is quite easy as they are sold through many banks and government post offices. You can even apply for purchasing the Sovereign Gold Bonds online through select banks.

Safe Investment

The Sovereign Gold Bonds are issued by the Government of India, and thus the risk of losing money on the investment is close to zero, making it one of the safest investment options.

Fixed Interest

The Sovereign gold bonds offer a fixed rate of interest, which is 2.50% per annum right now. The interest payments are paid out semi-annually on your initial investments.

Liquid Investments

Sovereign gold bonds are also traded on stock exchanges like NSE and BSE, which makes them easily tradeable and liquid. If you are looking for safe liquid investments, gold bonds are a good choice.

Tax Benefits

While the interest earned is taxable at your applicable tax slab, the capital gains of holding the Sovereign Gold Bonds for their duration are completely tax-free. The only exception is if you choose to sell them before maturity.

Portfolio Diversification

Sovereign Gold Bonds are a great tool to diversify your investment portfolio to bring more risk-free stability and fixed income to your investments in the long term.

Risk Reduction

With Sovereign Gold Bonds, there is no need to physically store gold, which can be at risk of getting stolen, lost or mismanaged. Sovereign Gold Bonds completely remove the threat of theft and losing a physical asset.

To Conclude

Sovereign Gold Bonds are a convenient and secure way to invest in gold. With low costs, high liquidity, interest earnings, and tax benefits, they offer many advantages over traditional investments in physical gold.

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