Seven Common Myths About Sovereign Gold Bonds Busted! (Rank Princess)

Seven Common Myths About Sovereign Gold Bonds Busted!

We’ve all heard about the Sovereign Gold Bond Scheme where investors get returns denominated in gold, mimicking the benefit of real gold. While this is a very beneficial scheme and allows you to use the bond for collateral loans or stock exchanges, there are a lot of popular myths and misguided facts about this plan, which are about to be cleared in this article. Here are the common myths about this scheme:

1) “This Scheme Is Not Government Approved” (MYTH)

This is a huge myth and is probably a crucial reason for many people to reconsider such a scheme.

Sovereign Gold Bonds (SGB) are government approved and are issued by the Reserve Bank Of India.

So there’s no dubiousness about your safety, as there is no chance of fraud occurring!

2) “Bonds Are Available Whenever, And Wherever!” (MYTH)

If you’re under the misconception that you can apply for a bond at any point throughout the year, then you’ve not wait received the right information.

SGB reissued in batches and of the Rs.15,000 crore bonds available, the first batch is said to be available from November 5th to November 20th, consisting of Rs.1,000 crores. All public sector banks in the main cities should possess the necessary information on these bonds if one decides to purchase it.

3) “Anyone Can Invest In This Scheme!” (MYTH)

Get out of the myth that the SGB is for everyone! Only citizens of India can invest in this scheme, and this strictly excludes NRIs.

4) “You Can Stay Incognito As Per Your Benefits!” (HUGE MYTH)

You can invest in this scheme unless you have undergone a KYC, thus identifying your personal details. This means that at the time of applying you’d have to present your PAN card (Aadhar Card Is Also Acceptable). So if one has the plan of converting their unaccounted cash into white ones, then they’re in for a nasty surprise!

5) “Avoid Further Taxations!” (MYTH)

Whoever came up with this tale has quite an internet following because this one had spread rapidly. The interests you earn out of this scheme are taxable every six months! Once your bond matures, a long-term capital gain will also be applicable meaning you’d have to shell out a 20% tax on your returns.

6) “There’s No Upper & Lower Limit for Bond Investments!” (BIG MYTH)

This is not factual, and there is an upper and lower limit for investments in this scheme! The bare minimum bond one has to buy is 2 grams worth of gold, while the maximum gold bonds can be up to 500 grams. Seeing as the fixed price for the gold is at Rs.2, 600.00 (Approx.) per gram of gold, your minimum, and maximum investments would start from at least Rs.5, 200.00

7) “Quit When You Want To” (MYTH)

The bonds issued have eight year tenure, offering an option of exiting only after the 5th year! Trading bonds on the market is also an option subject to the goodness of volumes. If the later is negated, then one can only receive his/her money after the eight or five year tenure time.

Stay Informed:

So get out there and invest wisely, and keep in mind the truth and only the truth while investing in these schemes! Happy investing to you.

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