Sovereign Gold Bond: 5 reasons to buy SGB as subscription date ends today

Sovereign Gold Bonds (SGBs) are one of the best investment options for those investing in gold. Here are the five reasons to buy SGB series-II. The last date for an SGB subscription is September 15

Sovereign Gold Bonds (SGBs) are one of the best investment options for those who are interested in investing in gold. These securities are backed by the government, which ensures the safety and trust of investment. Reserve Bank of India released SGB Series-II 2022-23 for subscription until September 15, 2023, and these gold bonds are available at Rs 5,923 per gram. 

The SGB Series II 2022-23 is a unique opportunity for all gold investors to modify their investment portfolio. The Sovereign Gold Bonds offer all the benefits of the physical gold without the associated risks and a regular income. 

If you are confused about investing in Sovereign Gold Bonds (SGBs), then here are the five reasons to invest in SGB Series II.

5 reasons to invest in SGB Series II

Assured Returns

The best thing about investing in Sovereign Gold Bonds (SGBs) is assured returns. The investors will get returns at a fixed rate of 2.50 per cent payable half-yearly on the nominal value.

No storage hassles 

There is no need to think about storing Sovereign Gold Bonds as these are available in digital form, unlike physical gold. The physical gold does have a fear of theft, and hence SGBs are more secure.

No Capital Gain Tax on redemption

There is no capital gain tax on the redemption of Sovereign Gold Bonds (SGBs). The government launched the SGBs in November 2015 under the Gold Monetisation Scheme. However, the interest earned from the SGBs is taxable as per the individual's income tax slab.

Use SGBs as collaterals for loans

Another benefit of investing in SGBs is that these bonds can be used as collateral for loans. The loan-to-value ratio is to be set equal to the ordinary gold loan, Reserve Bank of India instructed from time to time.

No GST and making charges

These Sovereign Gold Bonds are also exempted from Goods and Service Tax (GST), unlike bars and coins. You also don't need to pay any making charges on SGBs.

Discount for online buyers

The government has decided after consulting with the Reserve Bank of India to give a discount of Rs 50 per gram to all investors investing online and making the payment in digital mode. 

The issue price for such online investors is Rs 5,873 per gram.

One can easily sell these bonds through Banks, recognised stock exchanges, like NSE and the BSE, designated post offices, and Stock Holding Corporations of India Ltd (SHCHI).