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Digital gold vs sovereign gold bond

Investing in Digital gold in electronic format through ETFs and gold funds is considered a better investment option over buying physical gold as the latter entails high costs in the form of making charges, which are deducted at the time of selling the gold product.<br>Sovereign gold bonds or SBGs are gold bonds issued by the Reserve Bank of India (RBI) on behalf of the Government of India. The gold in this bond is sold on a per unit basis such that every unit derives its value from underlying one gram gold with 999 purity. The cost is calculated by taking an average of closing prices of gold for

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Digital gold vs sovereign gold bond

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  1. Digital gold vs sovereign gold bond

  2. Investing in Digital gold in electronic format through ETFs and gold funds is considered a better investment option over buying physical gold as the latter entails high costs in the form of making charges, which are deducted at the time of selling the gold product. Digital gold vs sovereign gold bond Sovereign gold bonds or SBGs are gold bonds issued by the Reserve Bank of India (RBI) on behalf of the Government of India. The gold in this bond is sold on a per unit basis such that every unit derives its value from underlying one gram gold with 999 purity. The cost is calculated by taking an average of closing prices of gold for the latest three working days preceding the subscription period.

  3. How SGBs Work SGBs are issued by the RBI in different tranches during the financial year. These securities are made available via banks, brokers, post offices and online platforms. A discount of INR 50 per gram is offered to investors who purchase them digitally to promote buying SGBs online. It is important to note that the RBI brings new series of SGBs for sale in the market throughout the year. So, if you miss the last one announced, you can always wait for the next issue to be announced.

  4. Benefits of Investing in SGBs SGB is a good option for investors who wish to buy gold only for the purpose of investment. SGBs ensures the quality of gold is protected and investors are secured against risk. They are also able to save on the cost of storing physical gold as these bonds are in a digital form and are kept in an investor’s demat account.

  5. Digital gold is like ‘physical gold’ but without the added issues of safekeeping and storage. There are no compromising risks on the purity of gold. Three companies – Augmont, MMTC-PAMP and SafeGold – that currently offer digital gold in India store equal amounts of physical gold is insured vaults. Digital gold can be bought in small units on multiple online platforms, however, there is a limit of Rs 2 lakh. Most providers have a clause for a mandatory exit or for taking delivery of the physical gold after a fixed period of time.

  6. Investing In Digital Gold Attractive Purity: Before hallmarking was made compulsory, the purity of gold was a major concern with buying physical gold, which, as we saw, is completely eliminated in the digital products. Security and locker charges: Keeping physical gold is a very risky business and storing it in bank lockers adds an additional burden in the form of locker rents, which is not the case in digital gold as it can’t be stolen from our demat accounts and additionally is tradable.

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