Sovereign Gold Bond

Sovereign Gold Bonds (SGBs), which are issued by the Reserve Bank of India (RBI), are a convenient way to invest in gold in non-physical form. These government securities, which are denominated in gold, offer sovereign guarantee on the interest and principal repayments. The interest is paid semi-annually. The principal amount, on the other hand, is linked to the gold’s value as determined by RBI from time to time. Key Features SGBs are efficient replacements for physical gold, and eliminate the risk of theft, and the hassles and cost of storage. The interest-bearing SGBs are issued in tranches by RBI on behalf of the government of India. The terms of issue, such as subscription, timelines and price, are notified by RBI. SGBs have a lock-in of eight years, but they can be redeemed during RBI’s prescribed buyback windows which open after the fifth year. Each SGB unit is...