Gold — The Golden Investment

Image from Goldprice.org

If only !!!

  • If only, I had invested Rs 500 in the year 2000 to buy 1gram of gold. It would have worth Rs 5000 now, a cool 10x growth in wealth.
  • If only, I could buy and sell gold like I buy stocks.
  • If only, I could get some interest on the money invested like FD
  • If only, I would not have to pay for Making charges
  • If only, my gold was safe and secure
  • If only, I could trust the purity

Wish Granted

As if RBI was listening to all your wishes and answer is Sovereign gold bonds. You can buy gold digitally and it will answer all the “if only” above.

Important Points in the form of FAQ

You will earn a 2.5% interest on your investment but this is SIMPLE INTEREST. In FD you normally earn compound interest. Interest will be credited semi-annually to the bank account of the investor

  • Although the tenure of the bond is 8 years, early encashment/redemption of the bond is allowed after the fifth year from the date of issue on coupon payment dates
  • The bond will be tradable on Exchanges if held in Demat form. This means you can sell any time provided someone is ready to buy it.
  • You will earn Simple Interest on the amount that was invested by the original investor. Say original investor bought 10 unit for 40000, You will get SI on 40000 and not on price you bought at.
  • You should compute how much SI you would earn v/s how much discount you are getting and see if it makes sense for you.
Image from RBI

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