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The central government recently discontinued the Sovereign Gold Bond (SGB) scheme, citing high borrowing costs.
This means that no new SGB tranches will be issued by the government. However, the existing SGBs will continue to trade on the exchanges.
SGBs have been an attractive option, allowing individuals to invest in gold risk-free while earning an annual return rate of 2-2.75%.
As gold prices are seeing a sharp rise in India, many are still keen to invest in the yellow metal as it is a safe-haven asset. Let’s look at some other ways to invest in gold.
A gold exchange-traded fund (ETF), which tracks domestic prices of physical gold, is a convenient way of investing in gold without storage or authenticity concerns.
Gold mutual funds (MFs) invest directly or indirectly in gold reserves by pooling investor money in gold-related assets like ETFs and gold mining stocks.
Investors can invest in the already existing SGBs that are traded on the stock exchanges in India. SGBs generally have a 5-year lock-in period.
Physical gold in the form of bars and coins is a popular way of investing in gold. However, it comes with concerns such as safety and storage charges.
While gold jewellery is considered an investment, it is not the most efficient due to purity concerns and making charges.
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