The SGB Series II 2022-23 is a unique opportunity for all gold investors to modify their investment portfolio. Sovereign Gold Bonds offer all the benefits of physical gold without the associated risks and regular income.
If you don’t know how to invest in Sovereign Gold Bonds (SGB), here are the five reasons to invest in SGB Series II.
5 reasons to invest in SGB Series II
The advantage of investing in Sovereign Gold Bonds (SGB) is assurance of returns. Investors will get a return at a fixed rate of 2.50 percent payable semi-annually on the face value.
No storage worries
There is no need to think about storing sovereign gold bonds as these are available in digital form, unlike physical gold. Physical gold is afraid of theft and SGBs are therefore more secure.
No capital gains tax on redemption
There is no capital gains tax on redemption of Sovereign Gold Bonds (SGB). The government launched SGBs in November 2015 under the gold monetization program. However, interest earned through SGBs is taxable according to the individual’s income tax bracket.
Using SGBs as collateral for loans
Another benefit of investing in SGBs is that these bonds can be used as collateral for loans. The loan to value ratio should be equal to that of regular gold loan, the Reserve Bank of India has said from time to time.
No GST and Fees Payable
These sovereign gold bonds are also exempt from Goods and Services Tax (GST), unlike bars and coins. You also don’t need to pay any setup fees on SGBs.
Discount for online shoppers
The government has decided, after consulting the Reserve Bank of India, to provide a discount of Rs 50 per gram to all investors investing online and making payment digitally.
The issue price for these online investors is Rs 5,873 per gram.
One can easily sell these bonds through banks, recognized stock exchanges like NSE and BSE, designated post offices and Stock Holding Corporations of India Ltd (SHCHI).