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The latest tranche of the government's sovereign gold bond is open for subscription from March 6–10. Know all about it.
Sovereign Gold Bonds, introduced in November 2015, allow individuals to invest in government securities that are denominated in grammes of gold.
Individuals buy gold in a non-physical form and receive interest of 2.5% per annum, which is paid semi-annually. The bonds, issued in tranches by RBI, mature in eight years but have a lock-in period of five years.
The bond has been priced at Rs 5,611 per gramme. Those making payments through digital mode receive a Rs 50-per-gramme discount on this price.
Analysts say sovereign gold bonds are one of the best ways to hold gold, primarily because of the tax advantage of holding to maturity.
Analysts stress the importance of the holding period and recommend to only invest in SGB if you have the willingness to hold for five to eight years.
Over the past 10 years, gold has generated a compounded annual growth rate of over 7%.
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