Sovereign Gold Bonds: From advantages to eligibility; all you need to know

livemint.com:

Sovereign Gold Bonds (SGBs) are a unique investment avenue that combines the attributes of gold with the convenience of bonds. These bonds are issued by the Reserve Bank of India, aiming to provide individuals with an opportunity to invest in gold without physically owning it. Introduced in 2015, SGBs serve as an alternative to physical gold and other investment instruments like gold ETFs, offering investors an avenue to diversify their portfolios and gain exposure to the value of gold while earning interest.

Here is everything you need to know about the Sovereign Gold Bond, it comes with several distinctive features that set them apart from traditional investment options. SGBs are issued by the Reserve Bank of India (RBI) on behalf of the Government of India, ensuring the credibility and security of the investment. SGB are government securities denominated in grams of gold.

They are substitutes for holding physical gold. Only resident individuals, Hindu Undivided Families, trusts, universities, and charitable institutions can buy SGBs subject to a maximum of 4KG for individuals and HUFs and 20KG for others. The limits are for a financial year.

SGBs can be bought online through your demat account or offline. There is a discount of ₹50 if you buy it online. You can buy it online in demat as well as certificate mode.

It must be bought through authorised selling agencies only. The tenure is for 8 years from the date of issue. Interest is paid on the issue price on a half-yearly basis.

This interest is paid in cash to your bank account. Interest Income is taxed at marginal rate of taxation i.e. at individual slab rates.