kindly find the appended info on Sovereign Gold Bonds.

Gold is a timeless investment. Traditional routes of investment include gold coins and jewellery. Jewellery cannot always be considered a financial asset, as it has sentimental value and serves a different purpose. All physical gold investments carry making charges and wastage. This eats into the value of the investment. Investment in gold needs to be seen as a hedge against financial assets and a portfolio diversification.

Sovereign Gold Bonds are issued by the RBI on behalf of the Indian Government. Each bond is denominated in grams of gold. On maturity, the grams will be redeemed, and cash will be deposited in the investor’s bank account. Sovereign gold bonds are a lucrative alternative to physical gold.

Advantages of investing in Sovereign Gold Bonds

Sovereign gold bonds are the ideal option for long term investors from an asset allocation perspective. They tend to outperform whenever there is a major financial and geo political crisis.

5-10% of one’s overall portfolio can be considered in gold.

Some of the other key points of SGB are:

1. If the bonds are held until maturity then exempted from capital gains tax.

2. This is the only form of gold investment that offers a cash flow. With SGB there’s a guaranteed interest payout of 2.5% p.a.

3. SGB is issued by the RBI on behalf of the government and has a sovereign guarantee.

4. Indexation benefit applies to long-term capital gains on the bonds.

5. The bonds can be transferred as gifts

6. SGB may be used as collateral to avail gold loans.

7. Bonds are tradable upon listing. However the liquidity is very low. Better to hold till maturity to reap maximum benefit. After 5 years there is an exit option given subject to tax liability with indexation.

8. Minimum investment starts at 1 gram of gold. Individual investors and HUF can invest up to 4 kilograms in a year. Trusts and Institutions can purchase up to 20 KG in a year.

Gold ETFs vs Sovereign Gold Bonds

Not able to attach comparison table. Will need to update it.