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Friday, October 22, 2021

Sovereign Gold Bond: Buy gold at a discount from today, get 2.5% annually

Sovereign Gold Bond (SGBs): The sixth series of sovereign gold bonds for the current financial year is opening from today. For this series, the government has fixed the price of gold bond at Rs 5117 per gram i.e. Rs 51170 per 10 gram. But on purchasing it online, you will get a 50 rupees discount on every village. In this context, the price of 10 grams will be Rs 50670 on buying online gold bonds. On Friday, gold on MCX closed at Rs 51448 per 10 grams. Experts are still considering the best time to invest in gold bonds. He says that gold has become cheaper by around 5000 rupees than its record high, due to which the price of gold bond has also been reduced from the previous series. At the same time, 2.5 percent annual interest in gold bonds makes it more attractive.

How much cheaper than market price?

In the current financial year, the online price for the sixth series of gold bonds is Rs 50670 per 10 grams. While the price of gold on MCX is Rs 51448 per 10 grams. In this sense, gold will be cheaper by around Rs 778. In such a situation, the full benefit of the fall in gold can be availed by investing through gold bonds.

How long can you invest?

Sovereign Gold Bond will open for investment from 31 August. One can invest in it till 4 September. The bond will be issued on 8 September.

How much can you buy gold?

The smallest bond under this scheme will be equal to 1 gram of gold. A person can buy a bond of a maximum of 500 grams of gold in a financial year. Overall, the limit for buying bonds individually is 4 kg, while 20 kg has been kept for the trust or organization.

Lock-in period

The maturity period of Sovereign Gold Bond is 8 years. However, after 5 years, there is also the option of exit. In this, capital gains tax is not required to hold till maturity. Being tax-free on maturity is also one of its unique quality. For this reason, experts advise long-term investors to invest in it. Looking at the return history of gold, it has given better and stable returns to investors in the long term. Gold prices will also increase in the long term, in this case, the returns of gold bonds will be better. At the same time, there will be an additional interest benefit of 2.5 per cent per annum.

Why the best time to invest?

Ajay Kedia, director of Kedia Advisory, says that if we talk about the present time, this series of gold bonds is opening at a very good time. Gold has become quite disconcerted from its high in the market. The current price balance is visible. At the same time, gold is expected to return rapidly in the coming days and by Diwali, it may again reach its high. Factors such as uncertainty in the economy, weakness of the dollar and geopolitical tension exist, due to which the boom in gold is yet to continue. In such a situation, investors must keep 8-10% gold in their portfolio.

Expense ratio and purity

The expense ratio in the sovereign gold bond is nothing. Being supported by the Indian government, there is no risk of default. It is easier and safer to manage than physical gold. Against gold bond facility. There is no problem of purity in this and prices are decided on the basis of pure gold.

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Source: www.financialexpress.com

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