Portfolio diversification with Sovereign Gold Bonds: Features, benefits, and returns

SGBs provide you benefits such as 2.5% interest p.a., LTCG exemption on redemption at maturity, sovereign guarantee, etc., which give them an edge over other forms of gold.

Whether for investment or consumption or both, Indians buy a lot of gold every year. Physical gold may have certain challenges, such as purity, the cost of keeping it in a bank locker, insurance charges, etc. These challenges are taken care of when you buy gold using various digital modes such as Gold ETFs, gold mutual funds, digital gold, sovereign gold bonds (SGBs), etc.  However, with the recent changes in debt funds taxation; gold ETFs and gold mutual funds seem to have lost some sheen compared to sovereign gold bonds. In this article, we will understand why you should invest in SGBs to diversify your portfolio, how to buy and sell sovereign gold bonds, the taxation angle, etc. Highlights of the article: Practise asset allocation based on your risk profile and diver...

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