Sovereign Gold Bonds

 Sovereign Gold Bonds 


Sovereign Gold Bonds:

Sovereign Gold Bonds (SGBs) are government securities denominated in grams of gold. They provide an alternative to holding physical gold. Investors buy these bonds from the government, and they're redeemed in cash on maturity. SGBs also offer interest at fixed rates, making them a unique investment option for those interested in gold.


When Sovereign Gold Bonds introduced ?

Sovereign Gold Bonds were introduced by the Government of India in November 2015. They were launched as a part of the government's efforts to mobilize the idle gold held by households and institutions and to reduce the demand for physical gold imports.

Why Sovereign Gold Bonds introduced ?

Sovereign Gold Bonds were introduced by the Indian government to reduce the demand for physical gold and promote financial savings. They aim to provide investors with a secure and convenient way to invest in gold without the risks associated with holding physical gold. Additionally, SGBs help the government in managing the country's gold reserves more efficiently.



Why people are investing Sovereign Gold Bonds ?


People invest in Sovereign Gold Bonds for several reasons:


  • Safety: SGBs are issued by the government, making them relatively safe compared to other forms of gold investment, such as physical gold or gold ETFs.

  • Interest Income: SGBs offer an additional benefit of earning interest, unlike physical gold. This interest rate is fixed and is paid semi-annually.

  • Capital Appreciation: Investors can benefit from any increase in the price of gold during the bond's tenure.

  • Liquidity: SGBs are listed on stock exchanges, providing liquidity to investors who may want to sell before maturity.

  • Tax Benefits: SGBs offer tax advantages such as exemption from capital gains tax if held till maturity and indexation benefits if sold after three years.

  • Convenience: Investing in SGBs can be done online and eliminates the need for storage and security concerns associated with physical gold.

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