Sovereign Gold Bond or Digital Gold: How to decide in which money will be beneficial, where will you get returns

There are many options to invest in gold in India. Investing in gold will be much easier in the digital age. Many fintech companies have also offered the option of investing in gold.

The bond is issued by the RBI on behalf of the Government of India.

Investment options come in all forms be it stocks (Stock) or in gold. Talking about gold, Sovereign Gold Bond for investment in India (Sovereign Gold Bond) and Digital Gold (Digital Gold) options are available. These are good options for investing in gold. However, problems arise when you do not know where you should invest and what is safe to invest in? Sovereign Gold Bonds (SGBs) are government securities denominated in grams, as per the Reserve Bank of India (RBI). They cannot be used as jewelry or gold bars like physical gold.

Let us tell you that the next installment of Sovereign Gold Bond i.e. SGB is opening for subscription from January 10, 2022. RBI has fixed the issue price for the new installment of the bond at Rs 4,786 per gram. The bond is issued by the RBI on behalf of the Government of India. Let us know which is a better investment option between Digital Gold and Sovereign Gold Bond?

How much can one invest in SGB?

In Sovereign Gold Bond, a person can buy a minimum of 1 gram and a maximum of 4 kg of gold in a financial year. Whereas HUFs can buy gold bonds up to 4 kg and trusts up to 20 kg.

Investors of Sovereign Gold Bonds will get interest at the rate of 2.5 per cent per annum. This interest will be available on half yearly basis. No capital gains tax will be levied on redemption. Can be used as collateral for loans.

Safe, no storage hassle like physical gold. Can trade on exchanges. Unlike physical gold, there is no GST and making charges.

Bonds can be bought directly or through agents of scheduled private banks, designated post offices, scheduled foreign banks, government banks, Stock Holding Corporation of India Limited (SHCIL) and licensed stock exchanges.

Sovereign bonds are limited in their use and must be held for at least five years. The bonds will not mature for the next 8 years even after the expiry of the period of five years. Selling before maturity transaction expense is high. Digital Gold can be available at any time at no additional cost in one of the world’s most liquid markets.

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