In News
- The Reserve Bank of India (RBI) has announced the Sovereign Gold Bond Scheme 2022-23 – Series III.
What are Gold Bonds?
- Gold bonds are government securities denominated in grams of gold.
- They are substitutes for holding physical gold. Investors have to pay the issue price in cash and the bonds will be redeemed in cash on maturity.
- The bond is issued by the RBI on behalf of the government.
- While the tenor of bonds is eight years, it can be redeemed after five years.
Benefits
- These bonds offer a superior alternative to holding gold in physical form.
- The risks and costs of storage are eliminated.
- Investors are assured of the market value of gold at the time of maturity and periodical interest.
- It’s free from issues like making charges and purity in the case of gold in jewellery form.
- The bonds are held in the books of the RBI or in Demat form eliminating the risk of loss.
Source:LM
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