FAQs: How to buy and sell sovereign gold bonds on stock exchanges

While it's true Indians love gold, we would never advise you to invest in gold. It is a pretty 'blah' investment option because they don't grow your wealth in the long run. That said, if you are still sold on gold, we'd suggest investing in sovereign gold bonds (SGB) only. (Not gold mutual funds because they recently lost their indexation benefits). So, without wasting more time, let's deconstruct SGB for you. What are SGBs exactly? SGBs are issued by the RBI. They are a safer, reliable substitute to holding actual gold. These bonds basically track the price of one gram of gold. SGBs are issued in batches called 'tranches' on specific dates during the year. These gold bonds usually have an eight-year maturity period. We'll explain the significance of this in a bit. Do sovereign gold bonds provide decent returns? SGB returns are dependent on the market price of gold at the time of liquidating your investment. You will also receive a further 1.25 per cent interest every six months (2.50 per cent per annum) on the issue price first launched by the RBI, something physical gold and gold

This article was originally published on April 07, 2023.