Sovereign Gold Bonds (SGBs) opens for subscription today, December 18th, 2023. Here’s a detailed breakdown of everything you need to know:
The SGBs will be sold through Scheduled Commercial banks (except Small Finance Banks, Payment Banks and Regional Rural Banks), Stock Holding Corporation of India Limited (SHCIL), Clearing Corporation of India Limited (CCIL), designated post offices, and recognised stock exchanges viz., National Stock Exchange of India Limited and Bombay Stock Exchange Limited.
Sovereign Gold Bonds Subscription and Duration:
- Start Date: December 18th, 2023
- End Date: December 22nd, 2023
- Tenure: 8 years with an exit option every 5 years after the 5th year (subject to terms and conditions)
Sovereign Gold Bonds Investment Details:
- Minimum Investment: Rs 1,000 (multiples of Rs 100)
- Maximum Investment: Up to 4 kg of gold per individual per fiscal year (calculated at issue price)
- Issue Price: Rs 6,199 per gram (subject to slight change based on gold price on the issue date)
- Discount for Online Applications: Rs 50 per gram
- Payment Methods: Online through internet banking/UPI or offline through designated bank branches
Once issued, the SGB investors will be compensated at a fixed rate of 2.50 per cent per annum payable semi-annually on the nominal value. The price of SGB will be fixed in Indian rupees on the basis of a simple average of the closing price of gold of 999 purity, published by the India Bullion and Jewellers Association Limited (IBJA) for the past three working days of the week preceding the subscription period1. The issue price of the SGBs will be less by Rs 50 per gram for the investors who subscribe online and pay through digital mode.
Sovereign Gold Bonds Interest and Returns:
- Guaranteed Interest Rate: 2.5% per-annum, payable semi-annually (June and December)
- Capital Appreciation: Linked to gold price movement (market driven)
- Tax Benefits: Interest income tax-free till maturity. Capital gains under long-term capital gains tax regime with indexation benefit.
Sovereign Gold Bonds Benefits and Features:
- Safe and Secure: Backed by the Government of India
- Hedge against Inflation: Gold acts as a natural hedge against inflation
- Liquidity: Available for trading on stock exchanges after 5 years
- Ease of Investment: Paperless investment through online platforms
- Nomination Facility: You can nominate a person to receive the bond and interest in case of your demise
The minimum permissible investment will be one gram of gold, while the maximum limit of subscription shall be four kg for individual, 4 kg for HUF and 20 kg for trusts and similar entities per fiscal year (April-March).
Sovereign Gold Bonds Who Can Invest?
- Indian residents (individuals, Hindu Undivided Families, trusts)
- Non-Resident Indians (NRIs) with PAN card
Sovereign Gold Bonds Where to Apply:
- Authorized branches of participating banks (list available on RBI website)
- Stock Exchanges (NSE and BSE) through demat accounts
- Online through internet banking/UPI of designated banks
Sovereign Gold Bonds Additional Information:
- The issue price might vary slightly on the issue date based on the gold price.
- You can access the detailed prospectus and FAQs on the RBI website (https://www.rbi.org.in/).
- Consider your investment goals and risk appetite before investing in SGBs.
Remember, SGBs offer a unique way to invest in gold with additional benefits like guaranteed interest and tax advantages. This upcoming SGB launch could be a good opportunity for those looking to diversify their portfolio and hedge against inflation.
