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About Sovereign Gold Bond; Gold Investment in India; Sovereign Gold Bond vs Gold ETF


The Government of India recently announced the much awaited Sovereign Gold Bond scheme. The bonds will be issued in denominations of 1 gram of gold. The issue and redemption price has been linked to the market price of gold. To add to this, investors will also earn an interest @2.75% per annum on their investment.

Those looking to invest in gold may find Gold Bonds a better option for investing in gold than buying physical gold or investing in gold ETFs. The following factors make the Sovereign Gold Bond more attractive over other options to invest in gold:

1. The bonds will be issued by RBI on behalf of Government of India.
2. Instead of buying gold in physical form, the investors can park their money in bonds whose price would be linked to gold prices.
3. Investors will also earn an interest @2.75% per annum on their investment amount.
4. These Bonds can be offered as collateral to take loan.
5. The investors will not have to pay any Fund Management charges as in the case of gold ETFs.

While all investment options in gold generate returns equivalent to the change in gold prices, the above factors make the Sovereign Gold Fund an attractive investment option.

Read More: FAQ on Sovereign Gold Bond

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