Investment in SGB

• Denomination & Limits

  SGBs are denominated in grams of gold, making it easier for investors to relate it to physical gold and to estimate the holdings and performance. When an investor buys an SGB, they are essentially purchasing a specific weight of gold. SGBs are available in denominations of one gram of gold and multiples thereof. The minimum investment starts at one gram, making it accessible to small investors, while the maximum subscription limit is set at 4 kg for individuals and Hindu Undivided Families (HUFs) per fiscal year.

• Pricing

  SGBs are issued in tranches by the RBI, and the issue price is calculated based on market prices as per the established method. Often, there is a discount for investors who apply online and pay through digital modes.

• Redemption and Premature Exit

  Although SGBs have an eight-year tenure, they offer liquidity through premature redemption after the fifth year on the interest payment dates. Additionally, SGBs can be traded on stock exchanges, providing an exit route through the secondary market.

• Regular Income

  The SGBs offer a fixed interest at the rate of 2.50% per annum on the amount of initial investment, which is credited semi-annually, and the last interest is payable on maturity along with the principal.

Why Invest in SGB?

Investing in Sovereign Gold Bonds offers several compelling advantages:

• Security

  As SGBs are backed by the Government, they carry minimal risk of default, offering high safety and security to investors.

• Safe

  SGBs are financial in nature and are held in the books of the RBI or in demat form, thereby being much safer and eliminating the risk of loss, theft, impurity, quality, etc, associated with physical gold.

• Returns

  SGBs provide dual returns - a fixed interest income and potential capital appreciation aligned with gold prices. This is an added advantage, as physical gold does not earn any regular income.

• Cost-Efficiency

  Unlike physical gold, SGBs eliminate costs related to storage and security. There are also no making charges, ensuring cost-efficiency and peace of mind.

• Hedge Against Inflation

  Gold is traditionally considered a hedge against inflation, and with SGBs, investors can protect their portfolio's value against it.

• Simplicity and Convenience

  Investing in SGBs is straightforward, with online applications making the process convenient with NJ E-Wealth Account. The bonds can be held in dematerialised form, simplifying management and reducing paperwork.

Who should consider investing in SGBs?

Sovereign Gold Bonds cater to a broad spectrum of investors, except NRIs, making them suitable for various financial goals and risk profiles.

• Long-Term Investors

  SGBs are ideal for those with a long-term investment horizon looking to accumulate wealth through gold.

• Conservative Investors

  SGBs are suitable for those seeking a safe and stable investment with predictable returns. They offer security and fixed-interest income, combined with the potential for gold price appreciation.

• Investors Seeking Diversification

  SGBs provide an excellent opportunity to diversify one's investment portfolio. Including gold in the portfolio can reduce overall risk and enhance returns, particularly during market volatility.

• Physical Gold Buyers

  Investors, families, and parents who used to invest in physical gold earlier can look at SGBs as an alternative. As seen, there are many advantages over physical gold.