SGBs are securities issued by Reserve bank of India on behalf of Government of India. They are denominated in grams of gold & are good substitutes to physical gold.
The quantity of gold for which the investor pays is protected, since he receives the ongoing market price at the time of redemption/ premature redemption. 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. SGB is free from issues like making charges and purity of gold in jewellery form. The bonds are held in the books of the RBI or in demat form eliminating risk of loss of scrip etc.
Persons resident in India are eligible to invest in SGB. Eligible investors include individuals, HUFs, trusts, universities and charitable institutions.