Do I invest in sovereign gold bonds or a money market fund for a shorter period of time?

This is a scheme offered by the Government of India and RBI for those who want to invest in gold but want to avoid the hassle of paying making charges. Under this scheme, one can own gold in the form of a certificate instead of a solid gold form. This type of investment is suitable for those investors who have a low-risk appetite. This type of investment also gives investors fixed income annually or half-yearly, varies according to on the scheme.

The interest rate that is currently being offered on these bonds varies around 2.4-2.5% per annum. These bonds require low-investment and low-risk and that is what is more attractive to the investors. However, its maturity period is a minimum of 8 years and may extend. The interest rate that is currently being offered on these bonds varies around 2.4-2.5% per annum.

This is a type of mutual fund under which investment is made into short-term, high-quality debt instruments, cash, and cash equivalents. This fund has an extremely low-risk profile. The best thing about this type of investment is the low maturity period which is less than 13 months. However, the principal is not guaranteed under this sort of investment.

One can use this investment to park funds that are lying idle for a short time.

So, if you are looking for something to park your idle funds you can opt for a money market fund. However, if you’re more of an asset developing person, you can opt for Gold bonds whilst keeping the maturity period and your financial goals in mind.

However, if you can stay invested for at least 3-5 years you can consider other options such as Debt Mutual funds, Liquid funds, etc. To have a detailed description of other short-term funds, follow the link: