A ninth instalment of the government’s Sovereign Gold Bond programme will be available for subscription for five days, starting late next month. In the SGB scheme, the Reserve Bank of India (RBI) issues bonds linked to the market value of gold to investors on behalf of government. The Sovereign Gold Bond scheme will be available from December 28 to January 1 in the ninth tranche, and for five days each in the remaining three tranches this financial year. Wealth planners say Sovereign Gold Bonds are an effective way to use gold as investment.
— IBJA (@IBJA1919) November 27, 2020
Here’s all you need to know about the government’s Sovereign Gold Bond (SGB) scheme:
Issue Price: The issue price will be announced few days before December 28. Currently, gold jewellery rates are near Rs 48,830 per 10 grams, according to the Mumbai-based India Bullion and Jewellers Association (IBJA), an industry body. (Also Read: Here Is How Sovereign Gold Bond Price Is Calculated)
Important Dates: There will be a total of 12 tranches this financial year.
|Tranche||Date of Subscription||Date of Issuance|
|2020-21 Series IX||December 28-January 1, 2021||January 5, 2021|
|2020-21 Series X||January 11-15, 2021||January 19, 2021|
|2020-21 Series XI||February 1-5, 2021||February 9, 2021|
|2020-21 Series XII||March 1-5, 2021||March 9, 2021|
|Source: Ministry of Finance|
Discount: A discount of Rs 50 per unit is applicable for those investing in the Sovereign Gold Bonds online.
Lock-In Period: The gold bonds come with a maturity period of eight years, with an option to exit after the first five years.
Interest Rate: A fixed rate of 2.5 per cent per annum is applicable on the Sovereign Gold Bond scheme, payable semi-annually. (Also Read: Physical Gold, Gold ETFs Or Gold Bonds: How To Approach Gold?)
Eligible Investors: The scheme is open to resident individuals, Hindu Undivided Families (HUFs), trusts, universities and charitable institutions.
Investment Limit: Gold bonds can be purchased in the multiples of one unit, up to certain thresholds for different investors. The upper limit for retail investors and HUFs is 4 kilograms (4,000 units) each per financial year.
How To Invest: The SGBs are sold through commercial banks, the Stock Holding Corporation, designated post offices, and stock exchanges BSE and NSE. The bonds are held in RBI books or in demat form.
Tax: The interest earned from gold bonds is taxable. However, the capital gains arising out of redemption are exempted for individual investors.