Here are some of the many benefits of investing in Sovereign Gold Bonds (SGBs):
The quantity of gold bought remains protected as you get the current market price at the time of redemption/premature redemption
The risks and costs of holding gold in physical form are eliminated
Additionally, you get periodic interest when you invest in SGBs
Unlike physical gold, there are no concerns with the purity of the gold as they are held in bonds
SGBs are held in dematerialized form with the Reserve Bank of India. This eliminates the risk of loss or theft