In just one month, the price of gold has jumped by more than 10 percent. One of the major reasons for this is the conflict between Russia and Ukraine. In the situation of global uncertainty, investors are considering gold as a safe investment, due to which its prices are increasing rapidly. However, a new sovereign gold bond is not proving to be as beneficial for investors as one of the cheapest options for investing in gold. While the luster of old sovereign bonds has increased and buying them is proving to be a profitable deal.
Sovereign Gold Bonds have a maturity period of eight years, but withdrawal is allowed after five years. It earns 2.5% interest during this period. At present, the price of most of the sovereign gold bonds is running below five thousand rupees. Whereas the face value is more than Rs 5300 per 10 grams.
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reason for cheap
Sovereign gold bonds issued on March 4 were priced at Rs 5109 per 10 grams. Whereas on March 8, the price of gold reached Rs 5341 per 10 grams. In such a situation, the bond price is about three thousand rupees less than the market. The benefit of tax exemption will be available only on the maturity of the bond of five years. If you sell before that, you will not get the benefit of tax exemption. Also, there is not much buying and selling of it in the market, due to which it is getting cheaper.
old bond shines
Experts say that if the sovereign bond issued three years ago is getting less than five per cent, then it is a profitable deal. Because the new investor will have to wait only two years for maturity. Along with this, attractive benefits of tax exemption will also be available. The interest on the bond may be 2.50 per cent but the real interest is only around one to 1.5 per cent.