PROTECTION OF INVESTMENT
- The quantity of gold for which the investor pays is protected, since he receives the ongoing market price at the time of redemption/ premature redemption.
NO STORAGE COST
- The risks and costs of storage are eliminated. The bonds are held in the books of the RBI or in demat form eliminating risk of loss.
ZERO HIDDEN CHARGES
- SGB is free from issues like making charges and purity in the case of gold in jewelry form.
ADDED INTEREST INCOME
- The Bonds bear interest at the rate of 2.50 per cent (fixed rate) per annum on the amount of initial investment. Interest will be credited semi-annually to the bank account of the investor and the last interest will be payable on maturity along with the principal.
EARLY REDEMPTION BENEFIT
- In case of premature redemption, investors can approach the concerned bank thirty days before the coupon payment date. Request for premature redemption can only be processed if the investor approaches the concerned bank at least one day before the coupon payment date. The proceeds will be credited to the customer’s bank account provided at the time of applying for the bond.
- The capital gains tax arising on redemption of SGB to an individual has been exempted. The indexation benefits will be provided to long terms capital gains arising to any person on transfer of bond. TDS is not applicable on the bond.
*Note : It is the responsibility of the bond holder to comply with the tax laws.