Schemes of earnings on the Internet 2020 kg, Sovereign Gold Bond Scheme (SGB) - Personal Banking
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Sovereign gold bonds have a tenure of eight years, with exit options are available from the fifth year. The minimum permissible investment unit is 1 gram of gold and the maximum limit of subscription is 4 kg for individuals, 4 kg for the Hindu Undivided Family, and 20 kg for trusts and similar entities per fiscal.
Sovereign gold bonds are issued by the RBI on behalf of the government. Apart from the rise in gold prices, the investor gets a fixed rate of interest on the investment amount throughout the tenure of the fund. The government will pay an interest at the rate of 2.
The interest is payable semi-annually. Gold has emerged as one of the best performing asset class this year, given the rising uncertainty over the coronavirus pandemic, people are rushing towards investing in gold as it is considered a safe haven asset. For investors it is advisable to invest in gold for portfolio diversification.
Sovereign gold bonds are considered one of the better ways of investing in gold as along with capital appreciation an investor gets a fixed rate of interest. Apart from this, it is tax efficient as no capital gains is charged in case of redemption on maturity. However, it is a good option only if one wants to invest in it for long-term as exiting before maturity could be difficult.
But one has to keep in mind that this is a long term investment unlike physical gold which can be sold immediately," said Shweta Jain, founder, Investography. Sovereign gold bonds are listed on exchange but the trading volumes are not high therefore, it will be difficult to exit before maturity.
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