Sovereign gold bond scheme may offer better returns than ETFs

Sovereign gold bond scheme, starting on November, is likely to come across as a better investment in gold as it would offer better returns on investment.

Zee Media Bureau

New Delhi: Going by the sovereign gold bond scheme announced by the Finance Ministry last week, Investors are likely to get higer returns on the scheme than the investments on gold exchange traded funds( ETFs).

According to The Economic Times report, sovereign gold bond scheme, which opens on November 5, would give 350-375 basis points higher returns on their investments than from ETFs. The sovereign gold bond scheme, is slated to offer 2.75% interest per annum.

Investors in gold bonds will not only earn 2.75% interest on their investment, but also save 0.75-1% on the expense ratio charged by gold ETFs, said the report.

The applications for sovereign gold bond scheme would be open between November 5 -20, and the bond will be issue on November 26.

Gold bonds will offer guaranteed 2.75% interest per year. This interest will be paid out semi-annually on the initial value of the deposit.