Diversify your investment portfolio with Sovereign Gold Bonds, combining security and potential for appreciation through government-backed gold investments.
When it comes to investing in gold, there are numerous ways to go about it. A common and conventional option for investing is physical gold, but there are some additional charges that you may have to bear. However, now you can avoid this by investing in Sovereign Gold Bonds, commonly known as SGBs.
The Government of India launched the SGB investment scheme in 2015 to reduce the increasing demand for physical gold. But is a Sovereign Gold Bond safe? Simply put, yes, because this bond is a government security.
Furthermore, there’s no need to bear the burden and risk of holding physical gold, as you can easily manage these bonds. Read on to understand the top reasons and benefits of SGB to make a well-informed decision.
Investing in SGBs is a smart option as it offers many benefits.
SGBs are an ideal alternative to buying physical gold, as there is no risk of theft
Unlike physical gold, the storage of these bonds is hassle-free and safe
You can either hold these bonds in their physical form as certificates or have them in a dematerialised form stored in a demat account
You enjoy additional security with SGBs as it is not easy to change the ownership of these bonds
Investing in physical gold is subject to making and wastage charges, which is not the case for SGB investment
All these advantages, when summed up, answer the question of whether SGB is safe. Along with safety, you can also easily purchase these bonds as the minimum limit is just 1 gram. You can make purchases online or through a cheque or demand draft.
Lastly, the high liquidity and flexibility offered by the SGB investment make it a viable choice. You can begin your investment in SGBs through Bajaj Markets. With an end-to-end digital application, you can invest in just 4 simple steps.
FAQs on Reasons to Invest Sovereign Gold Bonds
How many SGBs should I buy?
Experts recommend that SGB investments should make up 5-10% of your portfolio. However, you should consider your risk tolerance, investment horizon, and overall portfolio to ascertain the ideal quantity of investment.
Is it possible to convert Sovereign Gold Bonds into physical gold?
No. Sovereign Gold Bond is an alternative to holding gold, but you cannot convert it into physical gold.
Can I sell Sovereign Gold Bonds anytime?
SGBs have a 5-year holding period from the date of issue on the coupon. After this time period, you can encash or transfer it to other investors.
Is the Sovereign Gold Bond a good investment?
Yes. A Sovereign Gold Bond is an investment option backed by the Government of India that offers annual interest of 2.50%. This makes an attractive scheme with secure returns.
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