• The Sovereign Gold Bond (SGB) Scheme is designed to offer a safe and effective way for individuals to invest in gold without the need to purchase physical gold. Under this scheme, investors receive interest every six months, along with potential capital gains from the appreciation of gold prices.
• The tenure of the SGB bonds is 8 years. However, investors have the option to redeem their bonds earlier if they wish, but only after completing a minimum holding period of 5 years.
• After the 5-year mark, investors can redeem the bonds either on the interest payment dates or as per their convenience, based on the bond's maturity terms. Early redemption, though allowed after 5 years, may be subject to market conditions such as fluctuations in gold prices.
• The bond is considered an ideal long-term investment for individuals looking to gain exposure to gold's price movement while earning an annual interest rate (fixed at 2.5% per annum) without the risks and costs of holding physical gold.
• If an investor chooses to redeem the bond before the 5-year holding period, it would not be allowed under the scheme.
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