InvestorQ : Which one are better sovereign bonds or physical gold?
Pavithra Prabhakaran made post

Which one are better sovereign bonds or physical gold?

Allysin Pinto answered.
1 month ago

Physical gold has certain cons that are eliminated in the case of Sovereign Gold Bonds. I'll list them out. With gold in the physical form, you can never be sure of it's purity. You need a good eye to know the difference between fake and real. You need to go through great lengths to find a reliable and reputed jeweller to buy from.

Next is storage. Gold is coveted and can be stolen if you do not secure it properly. A safe or locker needs to be purchased to store it safely. Also gold has to be designed properly if you are buying it in the form of jewellery. Or else it's resale value would be low. As I have given the cons, I'll state the benefits too. Gold jewellery holds sentimental value in India. It is easily accessible and does not require a middle man to purchase it. It's a good investment as the value increases with inflation.

SGB is an alternative to real gold. As it is offered by the government of India, the risk is low. You receive a 2.5% interest semi annually. All the cons of physical gold isn't a problem with SGB and it gives an increase in value over the years.

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