What is Sovereign Gold Bond Disadvantages?

Sovereign gold bonds are issued by RBI in India with Rs 50 per gram online discount. The tenure for SGB is 8 years from the issuing date. Early redemption is possible after 5 years. Investors get 2.5% interest on the initial investment paid half-yearly.Logically we don’t see any major disadvantages with Sovereign gold bond. You are getting an assured return of 2.5% interest on your investment. Few of the negative point are listed below:

• SGB invested through an offline channel will not get Rs 50 discount per gram.
• SGB invested without demat format then funds are blocked for 5 years minimum.
• The volume of SGB is very low when you have SGB in demat format, so you will not get the best price when you wish to exit in peak gold price.