Sovereign Gold Bonds are government securities denominated in grams of gold. They offer investors a secure way to invest in gold without the hassles of physical storage.
Characteristics:
- Issued by the Reserve Bank of India (RBI) on behalf of the Government of India
- Denominated in grams of gold
- Earn interest semi-annually (currently 2.5% per annum)
- Maturity period of 8 years, with an exit option after the 5th year
- No risk of handling physical gold
Portfolio placement :
SGBs are ideal for investors looking to add gold exposure to their portfolio without the physical risks and costs associated with gold. They provide a combination of capital appreciation (linked to gold prices) and regular interest income.