Why Sovereign Gold Bonds are better than Physical Gold?

In terms of the Government of India Notification No. F.No.(7)-W&M/2019 dated September 30, 2019, Sovereign Gold Bonds scheme 2019-20 (Series X) will be opened for the period (sovereign gold bond 2020 dates) March 02-06, 2020. This is the last chance to purchase SGB in FY 2019-20. The next issue after March 2020 will come in the month of October 2020. If you are not planning to buy SGB (Sovereign Gold Bond 2020) on the upcoming issue then think one more time and read this full post to understand that Why Sovereign Gold Bonds are better to invest into Gold instead of buying (and storing) physical gold.

Do you get a question of what is sovereign gold bond?
and Why you should purchase it?
Keep reading to get your answers.

Gold is a good investment always. Looking at the past couple of years Gold has not gained much value. On the international market only gold is the one commodity which you buy and invest into it without any additional charges. In India, gold is seen as a jewellery but actually it is also a investment product where you can gain some good returns. Sovereign Gold Bond 2020 scheme is a way to invest into gold without physically buying and storing. Gold bonds are offered by RBI and hence it has no risk of the investment you make. The only risk you have is that the market value of the gold, at the time you sell, will be applied to your gold investment also (which is a obvious thing). If you look at the gold prices in the past you will see that it is growing. There are very less chances to loose money in gold (unlike equity where if market crash all your money can be lost). This yellow metal is a good commodity to invest to get better returns. Sovereign Gold Bond 2020 lock in period is 8 years (with an option to exit from the 5th year).

Tip: If you are looking for Gold Bond Return and Maturity Value Calculator Find it here

Buying physical gold is a good idea when you want to invest into gold but if you are buying physical gold just for the investment purpose then storage cost will be something which you need to pay every year and risk of holding physical gold is not a good idea. Sovereign Gold Bond issued by government of India is a good choice for you. There are several benefits that Sovereign Gold Bond 2020 offer which we have listed below:

  1. No hassle of storage and its cost as in case of physical gold: If you buy physical gold you have to store it at some secure place (either bank locker or at home locker) which come with some cost from your pocket. And if you bought physical gold just for the investment purpose then its not a good idea to spend money for the storage and safety.
  2. Assured returns of 2.5 percent per annum, payable half yearly: You will get extra 2.5% assured return per annum on the SGB investment. In case of physical gold it is not applicable.
  3. No GST and making charges unlike physical gold: If you purchase physical gold you have to pay Goods and Service tax and some additional making charges but for the bonds since it has not physical presence you don’t need it.
  4. Additional 50 rs on digital payments: If you are buying SGB through any online mode you will get additional 50 Rs off per gram on the issue price.
  5. No recurring annual expenses like in case of Gold ETFs 
  6. No Capital Gains Tax on redemption

Sovereign Gold Bond Scheme (SGB) 2019-20 Series V/VI/VII/VIII/IX is already completed and only last Xth series is remaining. The upcoming and the final issue sovereign gold bond 2020 dates is starting from March 02, 2020 and will be ending on March 06, 2020. SGB scheme gives you a chance to invest in gold so that you can have some handsome returns on the maturity. Sovereign Gold Bond (SGB) 2020 price rate today is Rs 4,260 (Rupees Four Thousand Two Hundred Sixty only) per gram. If you buy Sovereign Gold Bond online you will get an additional discount of Rs 50 per gram from the issue price

Important links to follow:

  1. RBI Notification for Gold Bond
  2. Government of India Notification

If you have any further questions about how to buy sovereign gold bond read this posts:

  1. Buy Gold Bond From ICICI Bank
  2. Sovereign Gold Bond HDFC
  3. Sovereign Gold Bond Scheme (SGB) Online SBI

If you have any questions related to Sovereign Gold Bond scheme feel free to comment below. Happy Investing.

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