Guide to Sovereign Gold Bonds (SGBs) vs. Physical Gold
Praveen Dubey (SEBI Registered RA)
SP RESEARCHVIA PVT. LTD. (INH000015808)
Gold as a Safe Haven Asset
Gold has historically acted as an inflation hedge and store of value during geopolitical uncertainties. With the government offering digital gold avenues, investors have alternatives to physical gold. The education team at SP RESEARCHVIA PVT. LTD. compares these options.
What is the main advantage of Sovereign Gold Bonds (SGBs) over physical gold?
SGBs offer an annual interest rate of 2.5% on the initial investment amount and are exempt from capital gains tax if held until maturity.
Taxation and Liquidity Trade-offs
While SGBs have an 8-year maturity period, they can be traded on exchanges if liquidity is available. Physical gold offers immediate liquidity but incurs storage costs and making charges.
Written by Praveen Dubey
Chief Research Analyst | SEBI Reg: INH000015808
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