Sovereign Gold Bond-
The sixth series of sovereign gold bonds for the current financial year is opening from today. For this series, the government of India has fixed the price of the gold bond at Rs 5117 per gram i.e. Rs 51170 per 10 gram. But on buying it online, you will get a 50 rupees discount in every village. In this context, the price of 10 grams will be Rs 50670 on buying online gold bonds. Gold on MCX closed at Rs 51448 per 10 grams on friday.
What does the expert say
Experts are still considering the best time to invest in Sovereign Gold Bonds. He says that gold has become cheaper by around 5000 rupees than its record high, due to which the price of the gold bond has also been reduced from the previous series. At the same time, a 2.5 percent annual interest in Sovereign gold bonds makes it more attractive.
How much cheaper than market price-
In the current financial year, the online price of the sixth series of sovereign gold bonds is Rs 50670 per 10 grams. While the price of gold on MCX has closed at Rs 51448 per 10 grams on Friday. In this sense, gold will become cheaper by Rs 778 per 10 grams. In such a situation, the full benefit of falling gold can be availed by investing through sovere gold bonds….
How long can you invest-
You can invest in Sovereign Gold Bonds from August 31, 2020 to September 7, 2020. The bond will be issued on September 8.
Lock in period-
The maturity period of Sovereign Gold Bond is slightly longer ie 8 years. However, after 5 years, there is also an option of exit. In sovereign gold bond investment, capital gains (Principal and interest) tax is not required to hold till maturity. Being tax-free on maturity is also one of its unique qualities. For this reason, experts advise long-term investors to invest in sovereign gold bond. Looking at the return history of gold, it has given massive and stable returns to investors in the long term. Gold prices will increase in the long term, with gold bond returns will be better. At the same time, there will be an additional interest benefit of 2.5 percent per annum.
Expense ratio and purity
There is nothing to managing charge (Expense ratio) of the Sovereign Gold Bond. Due to the supported of the government, there is no risk of default. Sovereign gold bonds are easier to manage than physical gold. Because it is in digital form, the facility of gold loan against you is available. There is no hassle of purity in Sovereign Gold Bonds and prices are decided on the basis of pure gold.
Why the best time to invest in sovereign gold bond
Ajay Kedia, director of Kedia Advisory, says that due to covid-19 if we talk about the present time, this series of gold bonds is opening at a very good time. Gold has become quite discounted from its high in the market. The current price balance is visible. At the same time, gold is expected to return fast in the coming days and it can reach near all-time high till Diwali. Due to the presence of factors like uncertainty in the economy, weakness of the dollar, and geopolitical tension, gold is going to continue to boom. In such a situation, investors must keep 8-10% gold in their portfolio.
How much can you buy gold
The smallest bond under Sovereign Gold Bond will be equivalent to 1 gram of gold. Any Indian can buy a bond of maximum 500 grams of gold in a financial year. Overall, 20 kg for the trust or organization, while the limit for buying bonds individually has been kept at 4 kg.
2.5 percent return guaranteed
In Sovereign Gold Bonds, along with the benefit of the rise in gold, interest of 2.5 per cent is also received annually. The interest of Sovereign Gold Bond will be deposited in the bank account of the investor every 6 months. The final interest is paid after the maturity period along with the principal. The maturity period is a little longer than 8 years, but it also has the option of 5 years, 6 years and 7 years. If the market price of gold falls, then there can be a risk of capital loss of Sovereign Gold Bonds.
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