Benefits of Sovereign Gold Bond (SGB)

 SOVEREIGN GOLD BOND (SGB) 

A Golden Opportunity That Gives You Triple Benefits To Rejoice

Sovereign Gold Bond (SGB) 

A. Benefits of Sovereign Gold Bond (SGB)

1. Gold That earns interest

2. Gold guaranteed by GOI 

3. Gold That cannot be stolen

BUY GOLD & EARN 2.50% INTEREST

B. What is Sovereign Gold Bond (SGB)?

SGBs are government securities denominated in grams of gold. These are issued by Reserve Bank of India on behalf of the Government of India. Like any other bond or commodity, investors pay the issue price which is linked to its market price. Upon maturity, the bonds can be redeemed for cash.

C. Why to invest in Sovereign Gold Bond (SGB)?

1) Diversification

2) Relatively liquid alternative for parking funds:

3) Tax treatment

4) Convenient and hassle-free:

1) Diversification:

Diversification of portfolio is one of the fundamental things in personal finance. Gold has been a popular asset form for investment. Traditionally, people use to buy jewellery or gold coins or bars when they wanted to invest in gold. However, investing in Sovereign Gold Bond (SGB) is a better option to invest in gold, compared with purchasing gold in physical or traditional form.

2)Relatively liquid alternative for parking funds:

Sovereign Gold Bond (SGB) are easily transferable and can be traded on stock exchanges within a fortnight from the date of issuance. In addition to that, it can also be used as collateral to avail loan from banks and other financial institutions. These factors combined with the stable price of gold, make SGBS a comparatively safe and relatively liquid avenue for parking of funds.

3) Tax treatment: 

The capital gains tax arising on the redemption of Sovereign Gold Bond (SGB) to an individual has been exempted. The indexation benefits can be taken to long term capital gains arising to any person on sell/transfer of bond.

4) Convenient and hassle-free: 

Sovereign Gold Bond (SGB)are held in the books of the RBI in dematerialized form, so it is similar to owning gold without the risk of loss or storage cost and other perils. Also, holding physical gold in the form of jewellery incurs making charges and loss in purity while changing form to conduct a transaction. This makes Sovereign Gold Bond (SGB) a convenient and hassle-free instrument for investing in gold.

D. Who can invest in Sovereign Gold Bond (SGB)? 

The sale of Sovereign Gold Bond (SGB) is restricted to Indian entities or investors who are ordinary resident in India including individuals, Hindu Undivided Familes,  universities, trust and charitable institutions. Individual investors for subsequent change in residential status as per IT Act. from resident to non-resident may exercise early redemption or continue to hold SGBS till maturity.

Subscription limits and interest:  

Sovereign Gold Bond's (SGBs) are available in denominations of one gram of gold and multiples thereof. The minimum permissible investment is 1 gram of gold, with a upper  cap of 4 KGs for individuals, HUFs and 20 KGs for trusts. All investors will be eligible to get interest at a fixed rate of 2.50 per cent per annum based on the nominal value, payable half yearly..

Maturity and redemption price: 

The tenor of the bond will be 8 years with an exit option from 5 th year onwards to be exercised on the interest payment dates. The redemption price/selling price of Sovereign Gold Bond shall be based on the average of the closing price of gold of 999 purity of previous three business days from the date of repayment.

E. How to invest in Sovereign Gold Bond (SGB) ?

Investors can subscribe to  Sovereign Gold Bond (SGB)through the following channels:

1)Scheduled Commercial banks only Small Finance Banks and Payments Banks not allowed)

2)Stock Holding Corporation of India Limited (SHCIL).

3)Designated post offices 

4) NSE and BSE.

The KYC norms for Sovereign Gold Bond (SGB) are the same as that for the purchase of physical gold. PAN issued by the Income Tax Department is mandatory for all applications.

Online applications: Applications received online and paid digitally will be eligible for a discount of 50 per gram. One can opt to hold Sovereign Gold Bond (SGB) in demat account or in form of holding certificates, which can later be converted to a demat form, if so desired by the investor.

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4) How to correct PAN data. a comparatively safe and relatively liquid avenue for parking of funds.

Have a Golden Investment life.