RBI Gold Bonds

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    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