Just like Ian Fleming’s iconic character, gold bonds have made a flamboyant entry into the scene.
On Nov 5th, the Prime Minister launched the much anticipated Gold Bond Scheme, which is aimed at limiting the allure of physical gold.
Here are a few things that you need to keep in mind succumbing to the yellow metal’s charms:
- The price of the bond would be benchmarked to the market price of gold
- The 10-year post-tax returns of gold are around 10-11%
- Gold bonds will pay an annual interest rate of 2.75% on the investment, apart from the capital appreciation
- Interest paid and capital gains would be taxable
- Gold bonds are more liquid and easier to safeguard than physical gold
Additional reading: Bonanza for Investors as Gold Heats Up