How is Sovereign Gold Bond schemes compared to Fixed Deposits?

Question

How is Sovereign Gold Bond schemes compared to Fixed Deposits?

Accepted Answer · 2020-08-31

Both are two different investments and depend on the risk appetite. Fixed Deposit is a safe haven and comesunder the low risk, low gain category hence, particularly suitable for risk-averse investors. SGBs are offering 2.5% assured interest return PA, but gold price play a major role in redemption price therefore, investors must have a healthy risk appetite.
You can have profit as well as loss with SGB investment, whereas in FDs you don’t have any chance of loss with your initial investment.
A fixed deposit is usually liquid and can be prematurely withdrawn. With SGB, if hold in demat format, you can sell them in open market (exchange), but depend on demand and supply.

In conclusion note:As per financial planners recommendations, gold should be only 5 to 10% of your entire portfolio. However you can have 20-30% of your investment in fixed deposit.

How is Sovereign Gold Bond schemes compared to Fixed Deposits?

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