How to Buy Sovereign Gold Bonds - Features and Benefits

In India, Sovereign Gold Bonds (SGBs) are government-backed investment choices that can be used in place of actual gold. The current market price of one gram of gold is equivalent to the minimum investment amount for SGBs. You must pay the issue price for the required amount of gold when purchasing SGBs. Based on the average closing price of 999-purity gold over the preceding three working days, you will be paid the corresponding cash amount at maturity. Although these bonds have an 8-years maturity, you can choose to redeem them early after 5 years. SGBs offer a dependable way to build wealth while removing storage and security issues, unlike actual gold. Along with possible profits, investing gets you to 2.5% as the SGB interest rate in 2024. 

Features and benefits of Sovereign Gold Bonds:

The features and benefits of SGBs are as follows:

1. There is no risk involved in holding SGBs as it is owning gold without physical possession
2. The SGBs can be transferred through the provision provided under the Government Securities Act.
3. The SGBs can be traded on the stock exchange within a fortnight from the date of issue
4. The SGBs are denominated in 1-gram units of gold and its multiples
5. The SGBs have a tenure of eight years. However, the holders get the exit option fifth year onwards.
6. The SGB redemption gold price is the simple average of the 999-purity gold's closing price for last three business days
7. The maximum limit of subscription for individuals is 4kgs, for Hindu Undivided Family (HUF) is 4kgs and for trusts is 20kgs.
8. The SGBs offer attractive interest rates
9. Individuals holding SGBs get exemptions from capital tax gains if held till maturity