You can open a free Demat account online within five minutes and start buying sovereign gold bonds. Sovereign Gold Bond can be bought either in the open market or in the secondary market. Click here to open your free Demat Account and buy Sovereign Gold Bond with a discount of Rs.50 per gram.
1. What is SGB (Sovereign Gold Bond)? Who issues SGB?
SGBs (Sovereign Gold Bonds) are government securities issued in grams of gold. They can be used as substitutes for holding gold in physical form. Investors shall pay the issue price by cash and the bonds are redeemed in cash on maturity. The Bonds are issued by the Reserve Bank of India (RBI) on behalf of GOI (Government of India).
2. What are the benefits of buying SGB (Sovereign Gold Bonds) over physical gold ?
The quantity in grams of gold for which the buyer pays is protected, as he receives the ongoing market price for the Sovereign Gold Bonds at the time of redemption or premature redemption. The SGB (Sovereign Gold Bonds) offer a superior alternative to holding physical gold. The costs and risks of storage are eliminated. Investors or buyers are assured of the market value of the gold price at the time of maturity and periodical (half-yearly) interest. SGBs (Sovereign Gold Bonds) are free from other issues like making charges or purity in the case of gold in ornaments or jewelry form. The bonds will be held in the books of the RBI or otherwise in Demat form which eliminates the risk of loss of physical gold etc.
3. What are the risks associated with investing in SGBs (Sovereign Gold Bonds)?
There is a risk of capital loss when the market price of gold falls. However, the investor will not lose in terms of grams or units of gold that the investor had paid for.