Your investment through SGB will not only save you the expenses like locker rent, insurance etc, but also earn you an interest of 2.5 per cent per annum payable half yearly.
Even as gold prices are hovering over Rs 48,500 per 10 gram in bullion markets currently, you have a chance to invest in the yellow metal at a cheaper rate of Rs 46,770 per 10 gram (Rs 4,677 per gram) in a secured way through the Sovereign Gold Bond (SGB), the ongoing Series III issue of which is slated to close today (June 12, 2020).
If you invest online in SGB, you will get 10 gram for Rs 46,270 (Rs 4,627 per gram) with no worry of protecting the precious metal. Not only its cheaper, but investing online is much easier than through physical application mode, provided you have a demat account.
While you need to pay for locker and/or take insurance to protect physical gold, your investment through SGB will not only save you the expenses, but also earn you an interest of 2.5 per cent per annum payable half yearly.
Moreover, along with saving on GST and making charges by investing in SGB instead of buying gold jewellery, you won’t have to pay even Capital Gain Tax on maturity.
Unlike chances of impurity in physical gold, SGB provides you investment in per gram gold with 999 purity.
Issued by the Reserve Bank of India (RBI) on behalf of the Government of India, SGBs are Government Securities denominated in gram of gold and issued for a maturity period of 8 years. But the Bonds may be redeemed on fifth year onward and may also be used as collateral for loans.
The minimum limit of investment in SGB is equivalent to 1 gram of gold and for individuals, the maximum investment limit is equivalent to 4 kg of gold taking together investments in all the tranches of SGB in a financial year.
While SGB is a very secure way of investment, there may be a risk of capital loss if the price of gold declines at the time of redemption or maturity.
So, if you want to invest in gold at a cheaper rate than the market price and that too in a secured way, you have to do it quickly before the issue closes today.