Sovereign Gold bonds the millennials way to invest in Golden metal
Sovereign Gold Bond is also known as SGBs are government securities denominated in the form of grams of gold. They are substituted for holding physical gold and is much lucrative deal as it also provides dividend with an option of availing physical gold at the time of maturity in order to purchase it the Investors have to pay the issue price in cash and the bonds will be redeemed in cash on the date of maturity. The bond can be used to avail loan under security for personal needs from private lenders and banking institutions. The Sovereign Gold Bond is issued by Reserve Bank Of India on behalf of the Government of India. Presently the bond comes with a freeze in a period of 5 to 8 years after which the bond can be converted into cash on investors’ discretion.
Why should investors invest in Sovereign Gold bond Scheme
By Investing In Sovereign Gold Bond, The quantity of gold for which the speculative investor pays is highly secured and protected since he receives the bond at the ongoing market price at the time of redemption/ premature redemption. The SGB offers an attractive alternative choice in contrast to holding up gold in traditional physical form as a commodity by this the risks and costs of storage of gold is eliminated while Investors are assured of the market value of gold at the time of maturity and provide subsequent periodical interest. SGB as an investment is comparatively free from issues pertaining in general physical form like making charges and purity in the case of gold in jewelry form. Sovereign Gold bonds are held in the books of the Reserve Bank or in dematerialized form electronically eliminating any risk of loss of scrip theft, robbery, etc.
SGBs as a mode of investment in prevailing economic disturbances
Before pandemic Globally a sharp decline in the interest rate on Fixed deposit and mutual funds over the last few years alongside high volatility prevailing in the equity market have brought investor attention towards the yellow metal. The golden metal offers a good alternative to other investment ideas As the gold has outperformed other asset classes by giving record 43% interest in past one year and consistently giving a CAGR of 20% in last 10 years making gold the best choice for investors to park their funds Sovereign Gold Bond offer attractive valuation along with decent interest at an attractive proposition of 3% besides to this the capital gain in future will act as an instrument of hedging against future rupee depreciation which can arise due to a fall in the economy. The uncertainty in economic activity gives gold an attractive spot as an investment idea As the prices of gold is expected to touch a new all-time high as INR 80,000 by 2021 In India, prices will further be aided by any future discrepancy and weaknesses in the currency making Sovereign Gold the best investment scheme for investment purpose.
Currently, the sovereign gold bond can be bought between 3rd August 2020 to 7 th August 2020. Investment can be made on the following website.
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