What is Sovereign Gold Bond?
Sovereign Gold Bonds (SGBs) in India are financial instruments issued by the Reserve Bank of India (RBI) on behalf of the Government of India. They aim to provide individuals with a means to invest in gold without the need to physically own it. Here’s a detailed explanation of Sovereign Gold Bonds:
Advantages of Sovereign Gold Bonds
- Safety and Security: SGBs are issued by the Government of India, making them a sovereign-backed investment. This provides investors with a high level of safety and security.
- Interest Income: Unlike physical gold, SGBs offer an additional benefit of earning guaranteed annual interest rate of 2.5% p.a. on the Issue Price. The interest is paid semi-annually.
- Capital Appreciation: Similar to physical gold, SGBs provide investors with the potential for capital appreciation based on the price movement of gold in the market. Investors can benefit from the rise in gold prices over time.
- Tax Benefits: SGBs offer tax advantages to investors. While the interest earned on SGBs is taxable as per the investor’s income tax slab, capital gains arising from the redemption of SGBs are exempt from capital gains tax if the bonds are held until maturity. This can result in significant tax savings for investors.
- Liquidity: SGBs are tradable on stock exchanges, providing investors with liquidity and the option to exit their investment before maturity through secondary market transactions.
- Convenience: Investing in SGBs eliminates the need for storing and safeguarding physical gold, reducing associated costs and risks. SGBs are held in electronic form, making them convenient to buy, sell, and transfer.
Key Things To Know Before Investing In Sovereign Gold Bonds:
- The Minimum Investment for an individual / HUF In SGBs is 1 gram and the maximum is 4kg.
- The Minimum Investment for Trust and other similar entities in SGBs is 1 gram and the maximum is 20kg.
- The Sovereign Gold Bonds are sold at the last three days’ simple average of the closing price of gold of 999 purity preceding the subscription period.
- The tenure of SGBs is eight years. The Sovereign Gold Bonds in India have a mandatory lock-in period of five years.
- An investor can withdraw the bond after the completion of 5th year. The withdrawals are allowed only on interest payout dates.
What is Silver ETFs?
Silver ETFs (Exchange-Traded Funds) are investment funds that track the price of silver and trade on stock exchanges, similar to stocks. These ETFs hold physical silver bullion or invest in derivative contracts linked to the price of silver. Investors can buy and sell shares of these ETFs throughout the trading day, providing them with exposure to the price movements of silver without needing to own physical silver or futures contracts.
Silver ETFs offer several advantages to investors, including:
- Liquidity: Since they trade on stock exchanges, investors can buy and sell silver ETF shares easily during market hours.
- Diversification: Investing in a silver ETF allows investors to diversify their portfolios by adding exposure to the precious metals market.
- Cost-Effective: Compared to purchasing physical silver or investing in futures contracts, investing in silver ETFs typically incurs lower costs, such as storage fees or brokerage commissions.
- Transparency: Silver ETFs often provide transparency into their holdings, allowing investors to know exactly what assets they are investing in.
- Accessibility: Investing in silver ETFs is accessible to a wide range of investors, including retail investors who may not have the resources to purchase physical silver in large quantities.
Some well-known silver ETFs include iShares Silver Trust (SLV), Aberdeen Standard Physical Silver Shares ETF (SIVR), and Invesco Physical Silver ETF (SIVR).
What is Platinum ETF?
Platinum ETFs (Exchange-Traded Funds) are investment funds that track the price of platinum and trade on stock exchanges. Similar to other commodity ETFs, platinum ETFs can hold physical platinum bullion or invest in derivative contracts linked to the price of platinum.
Investors can buy and sell shares of platinum ETFs throughout the trading day, providing them with exposure to the price movements of platinum without needing to own physical platinum or futures contracts.
Investing in platinum ETFs offers several advantages for investors:
- Exposure to Platinum Prices: Platinum ETFs provide investors with exposure to the price movements of platinum, allowing them to participate in potential gains from increases in platinum prices.
- Diversification: Adding platinum to an investment portfolio can help diversify risk, especially for investors heavily concentrated in stocks or bonds. Since platinum prices may not move in tandem with traditional asset classes, its inclusion can potentially reduce overall portfolio volatility.
- Liquidity: Platinum ETFs trade on major stock exchanges, offering liquidity similar to stocks. Investors can easily buy and sell shares throughout the trading day at market prices, providing flexibility and access to their investments.
- Cost-Effectiveness: Investing in platinum ETFs is often more cost-effective than purchasing physical platinum or trading futures contracts. ETFs typically have lower expenses and fees compared to other investment vehicles, making them an efficient way to gain exposure to platinum.
- Transparency: Platinum ETFs usually disclose their holdings regularly, allowing investors to see the assets they own. This transparency provides clarity and helps investors make informed decisions about their investments.
- Accessibility: Platinum ETFs are accessible to a wide range of investors, including retail investors who may not have the resources to buy and store physical platinum. With just a brokerage account, investors can easily buy and sell shares of platinum ETFs, making it a convenient option for those interested in platinum investments.
Why Ashutosh Financial Services?
Ashutosh Financial Services is a 20+ years old company that has been assisting individuals and companies in various aspects like Investment, Insurance, Income Tax Planning, etc. At Ashutosh Financial Services we always put the investors’ interests first and do our best to ensure that investors’ objectives are achieved in a timely manner. We strive to make every Indian financially literate and independent.
We at Ashutosh Financial Services put maximum importance on understanding your Investment objectives and creating a customized investment plan to ensure the complete achievement of your investment goals. We pride ourselves to be the best goal-based planners. Post Investment, we keep regular track of all your investments to ensure the complete achievement of your investment objectives.
Through our years of experience, we at Ashutosh Financial Services have created a process through which we aim to provide you with the best investment-related services and ensure that you have a hassle-free experience. We have a team of well-qualified and experienced members that are more than enough capable to assist you regarding all your investment matters.
Preliminary
In the preliminary discussion, we will inform you all about sovereign gold bonds. We will explain to you in detail all the key things about investing in SGBs.,
Investment
Process
Once you have confirmed your decision to invest in sovereign gold bonds, we will begin the investment process. You will have to pay the agreed amount for the sovereign gold bonds via a cheque or net banking & once the payment is received it will take around 3 days for the units to reflect in your demat account. All sovereign gold bonds will be credited to your demat account only
After
Investment
Service
Once the investment is done, you will be provided with a dedicated Relationship Manager. All your queries will be solved by the relationship manager.
Our aim is to become your one-stop solution for your financial needs. Through our expert and qualified team, we try to give you the best advice regarding your investments. We also keep ourselves updated with all the activities happening in the world of finance. We aim to provide you with quality & unbiased services to secure your goals and future needs. We at Ashutosh Financial Services, are committed to continuously providing financial services to our investors to the best of our ability.
Our USPs are as under:
The interest on these bonds is taxable as per the Income Tax Act, 1961. On redemption, there is no capital gains tax on this. Also, the long term capital gains come with indexation benefits.
