Sovereign Gold Bonds (SGB) are government securities issued by Reserve Bank of India on behalf of Government of India. They are denominated in grams and can be purchased instead of physical gold. Investors have to pay the issue price in cash and the bonds will be redeemed in cash on maturity.
The bonds will be open for subscription from Monday, July 18 to Friday, July 22, 2016 and will be issued on August 5, 2016. Below are a few questions you may have regarding the scheme and we’ve tried to address them.
Why should I buy SGB rather than physical gold? What are the benefits?
- The quantity of gold for which the you pay is protected, since you receive the ongoing market price at the time of redemption or in case of premature redemption.
- Superior alternative to holding gold in physical form with no risks and costs of storage
- Free from issues like making charges and purity
- Earn periodical interest @ 2.75% per annum on the amount of initial investment