What are Gold Bonds and should you invest in them?

You are throwing away a chance to make some excellent returns if you invest in gold coins and gold bars. There are gold bonds available on the market that enable you to profit from price fluctuations and also pay you a fixed interest rate similar to that of bank fixed deposits. A straightforward yet superior substitute for purchasing actual gold is a sovereign gold bond. Let me discuss the benefits of investing in gold bonds.

How do gold bonds work?

In grammes of gold, a sovereign gold bond is valued. You can purchase in increments of 1 gramme (gm). So, 1 gramme is the required minimum investment. A maximum of 4 kilogramme of gold per investor and financial year may be purchased through gold bonds. There is a nomination facility. Do not forget to update the nominee data while investing; you may also do it later.
the amount of interest rate
You’ll be astonished to learn that a set interest rate is one of the main advantages of the sovereign gold bond programme. The annual interest rate on gold bonds is 2.50%. Keep in mind that this goes beyond the rise in the price of gold. On the nominal value, interest is paid every six months or every two years.

Duration of the investment, Investors in gold bonds also have the choice to sell their bonds at any moment on stock exchanges. Please take note that the appropriate capital gains tax will be charged at the same rate as for real gold in the event that the bonds are sold on the exchange platform.

Gold bonds typically have a duration of 8 years. After five years, the exit option is available. You must redeem your investment early if you want to leave before maturity. You must inform the bank. For IDFC FIRST Bank, the standard advance notice period is 30 days.