Q. What benefits are offered by the Sovereign Gold Bond Scheme to investors?

1. They can invest on as little as 1gm of gold
2. They get not only the market value of gold at the time of maturity, but also periodical interest rates
3. Their investment is protected from capital loss if the market price of gold declines

Select the correct answer from the codes given below:
Answer: Only 1 & 2
Notes: Sovereign Gold Bonds (SGB) are government bonds issued by the central bank, denominated in gold, to reduce physical gold demand and imports. Launched in 2015, they offer a fixed interest rate of 2.5% per year, with an 8-year tenure and a minimum investment of 1g of gold. Available only to Indian residents, trusts, universities, charitable institutions, and HUFs, SGBs provide market price protection at redemption, eliminating storage risks and costs associated with physical gold. They are held in RBI books or demat form, avoiding issues like making charges and purity. While there is a risk of capital loss if gold prices decline, the investor retains the units of gold purchased.