RBI Gold Bonds

Why in News

• The Reserve Bank of India (RBI) has announced the Sovereign Gold Bond Scheme 2022-23 – Series III.

What are Gold Bonds?

• Gold bonds are government securities denominated in grams of gold.
• They are substitutes for holding physical gold. Investors have to pay the issue price in cash and the bonds will be redeemed in cash on maturity.
• The bond is issued by the RBI on behalf of the government.
  • While the tenor of bonds is eight years, it can be redeemed after five years.

Benefits 

• These bonds offer a superior alternative to holding gold in physical form.
• The risks and costs of storage are eliminated.
• Investors are assured of the market value of gold at the time of maturity and periodical interest.
• It’s free from issues like making charges and purity in the case of gold in jewellery form.
• The bonds are held in the books of the RBI or in Demat form eliminating the risk of loss.