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Gold may continue to rise; are sovereign gold bonds a good investment opportunity?

SGBs are government securities, denominated in grams of gold, and are substitutes for holding physical gold.

July 07, 2020 / 08:33 PM IST

The fourth tranche of sovereign gold bonds (SGBs), issued by the Reserve Bank of India on behalf of the government, opened for subscription from July 6 with the issuance date of July 14. The subscription closes on July 10.

SGBs are government securities, denominated in grams of gold, and are substitutes for holding physical gold.

These bonds, which have a tenor of eight years, are redeemed in cash after the maturity period ends but there is an option to exit after the fifth year, which can be exercised only on the interest payment dates.

Read more: Sovereign Gold Bonds: How to buy, current price and tax rate - here's all you need to know