Sovereign Gold Bonds

[CARDBITRAGE]

Hello everyone! Planning on investing a chunk of my portfolio in gold. I was considering buying SGBs this quarter, mostly from the secondary market. Does anyone have prior experience buying and selling SBGs? Also, is there enough liquidity(for seven figures) in the secondary market? I would appreciate it if someone could throw some light on this.
Thanks.

 

[SamPtnk]

Just buy directly from RBI and hold till maturity to get tax free return .
Secondary market has liquidity issues .Use Etf here

 

[thunderbolt]

Don’t buy from RBI directly, you get good discounts in secondary market.
Use this tool to pick the best SGB that fits your needs: https://sgbanalyzer.com/

How to use the analyzer:

 

[CARDBITRAGE]

Don’t buy from RBI directly, you get good discounts in secondary market.
Use this tool to pick the best SGB that fits your needs: https://sgbanalyzer.com/

How to use the analyzer:

Thanks a lot for that! As you mentioned I found some great deals in the secondary market. I'm looking for bonds that mature in 2027. ETFs are great but are subject to taxation, so I'm not considering that.

 

[thanix]

Thanks a lot for that! As you mentioned I found some great deals in the secondary market. I'm looking for bonds that mature in 2027. ETFs are great but are subject to taxation, so I'm not considering that.

Isn't buying sbg from secondary market and keeping till maturity also taxable?

 

[CARDBITRAGE]

It is tax-free as long as it is held till maturity(only the interest component is taxable as per IT slab), doesn't matter if it is from the primary or secondary market. If one decides to sell it on the secondary market after possession, then capital gains would apply.

 

[thunderbolt]

Isn't buying sbg from secondary market and keeping till maturity also taxable?

No.

How sovereign gold bonds are taxed: A complete guide

Although Sovereign Gold Bonds are tax-free if you hold them till maturity, they are taxable if you sell them before they mature. This, even if you sell after lock-in.

www.moneycontrol.com

 

[luciferlucifer is verified member.]

whats the best strategy to buy SGB from the secondary market?

 

[thunderbolt]

whats the best strategy to buy SGB from the secondary market?

If you plan to hold it till maturity then buy the one with highest discount.

 

[CARDBITRAGE]

whats the best strategy to buy SGB from the secondary market?

Start with tracking the prices. Access the liquidity of the series and the price of each unit. As per your holding period, you can see which offers you a good discount on the spot price. My tip is don't place a large order at once, rather accumulate these bonds in small quantities as you'll risk driving up the price. Please keep in mind that these bonds are best treated illiquid as it is very hard to find buyers in the secondary market if the need arises, and the tax-adjusted returns if sold before maturity won't make much sense. Ideally, I would buy SBGs with high daily volumes, but it's rare to find a good deal on those.

 

[Deleted member 9785]

Gold at 60,000 🙂, while stocks are falling. I feel this decade 2030 gold price will reach above 1,20,000 per 10 gram, as more countries move away from dollar and people lose trust in banks and fiat money.

 

[CARDBITRAGE]

Yup gold is expected to outperform in the short term. I've built a decent position ever since the war started and I'm sitting on some handsome returns. 🙂
In the long-term, I think gold is a brilliant investment seeing the loss of value and trust in fiat money. One day when the global debt bubble will burst, gold is going to outshine every other asset class.

 

[Deleted member 9785]

12% up now 🙂

 

[suhasa010]

I have about 2% of my overall portfolio in GOLDBEES ETF. Should I just jump the gun and switch to SGBs?

(I have no other gold investments)

 

[CARDBITRAGE]

I have about 2% of my overall portfolio in GOLDBEES ETF. Should I just jump the gun and switch to SGBs?

(I have no other gold investments)

Depends on your holding period. If you are comfortable with a lock-in period of 8 years, then SGBs can be redeemed tax-free. If you do need to liquidate, you will most likely have to sell at a discount to the spot price(2-7%) in the secondary market. Also, you get 2.5% of the bond price as interest every year till maturity which you won't get in other forms of gold investments.

 

[suhasa010]

Depends on your holding period. If you are comfortable with a lock-in period of 7 years, then SGBs can be redeemed tax-free. If you do need to liquidate, you will most likely have to sell at a discount to the spot price(2-7%) in the secondary market. Also, you get 2.5% of the bond price as interest every year till maturity which you won't get in other forms of gold investments.

I am okay with long term investment actually. I shall consider your advice. Thank you.

 

[CCIND]

Don’t buy from RBI directly, you get good discounts in secondary market.
Use this tool to pick the best SGB that fits your needs: https://sgbanalyzer.com/

How to use the analyzer:

Thanks for sharing

 

[thanix]

I am okay with long term investment actually. I shall consider your advice. Thank you.

One funny thing is even if you buy in secondary market now for previous series of bonds having less maturity period, if you hold on till maturity it is tax free.

 

[CARDBITRAGE]

One funny thing is even if you buy in secondary market now for previous series of bonds having less maturity period, if you hold on till maturity it is tax free.

Did you find something to back this? I mailed the RBI regarding this and they sent some stupid generic response.

 

[thanix]

Did you find something to back this? I mailed the RBI regarding this and they sent some stupid generic response.

I came to know from this thread itself. Check previous posts for an media article.