How to invest in gold? Benefits of investing in gold bonds

Invest in Gold

If you wish to invest in gold then investing in gold bond is really a good option. When one decides to invest in gold, first things that come to mind are gold coins, gold funds, gold jewelry, gold ETF and such other options but investing in gold bonds is a very good option as compared to others.  Have a look at 10 major benefits of investing in gold bonds.

Benefits of investing in gold bonds

It gives a better return, one gets a good interest by investing in gold bonds. Along with interest if there in an increase in gold price returns are given accordingly. There are no charges levied as done in Demat accounts and ETF. The interest rate on gold bonds is 2.75 percent. The interest rate is decided as per the current rates of gold.

Savings along with investment

One can save the gold bond in digital form for security. You can also keep it in your home as well as Demat account. This way you can save the money by not spending it on lockers.

No tension of fraud

There is no scope of fraud and impurity of gold in gold bond. Gold obtained from the gold bond gives value of pure gold.


Saving in capital gain tax

Costing of gold bonds depends on the gold rates. Decrease in the gold rates gives negative returns on gold bonds. To avoid this government has been issuing gold bonds with longer durations. In this, the investment period is eight years but one can withdraw money after five years too. If one withdraws money after five years then capital gain tax is not levied.

Gold bond means government guarantee

Gold bond is a souvenir guarantee given by the government. But this does not mean that it will always give positive returns.

One can increase the maturity of gold bond

You can increase the maturity period to three more years after the bond gets mature. One can save oneself from the negative impacts of markets at the time of maturity.


The quantity of gold bond

Gold bonds are issued on the basis of the particular weight of gold. One unit of the bond is one gram gold. The bonds can be bought in multiples of 1 gram. A person cannot buy more than 500 grams of gold. One can buy the bond in minimum 2 grams to maximum 500 grams. It is necessary to invest a minimum of 5000 to 6000 rupees. The minimum and maximum limit is one year.
Easy to buy gold bonds: Gold bonds can be easily bought from any branch of SBI, post office, stock holding corporations, NSE or BSE and more.

Trading of gold bond in the secondary market

The minimum lock-in period in gold bond is 5 years. If you need money before 5 years then you should know that it is listed on the secondary market. This means you can sell your gold bond to any other person at any time through a secondary market. One gets the facility to trade via NSE and BSE. You can sell your gold bond through the Demat account and registered brokers. The rate of bonds depends on the market. Gold bonds can be bought through secondary market too.


Loan by gold bond

In times of need, the gold bond can be used to get a loan from the bank. Gold bond is like post office National Saving certificate.

So many benefits of gold bonds are enough proof for anybody to invest in gold through gold bonds. Next time when you wish to invest in gold remember benefits of gold bonds and act accordingly.

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