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Sovereign Gold Bond scheme opens today: All you need to know

Sovereign Gold Bond scheme: Sovereign Gold Bonds are sold through banks, designated post offices, and recognised stock exchanges National Stock Exchange of India Limited and BSE.

August 30, 2021 / 10:20 AM IST
Representative image (Source: Shutterstock)

Representative image (Source: Shutterstock)

 
 
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Sovereign Gold Bond Scheme will be open for subscription from August 30 for five days, the Reserve Bank of India (RBI) announced.

The issue price for Sovereign Gold Bond Scheme 2021-2022, Series 6, has been fixed at Rs 4,732 per gram of gold. The RBI issues the bonds on behalf of the Government of India.

Read Also: Sovereign Gold Bond Series VI opens on August 30: What is it, who can buy, benefits, discounts and other details

India's largest lender State Bank of India (SBI) tweeted from its official handle that “Planning to invest in Gold? Here are 6 golden reasons to invest in Sovereign Gold Bonds. SBI customers can invest in these bonds on http://onlinesbi.com under e-services".

Sovereign Gold Bond Scheme or Gold scheme

Sovereign Gold Bond Scheme was launched by the government in November 2015, under Gold Monetisation Scheme. Under the scheme, the issues are made open for subscription in tranches by RBI in consultation with GOI. RBI Notifies the terms and conditions for the scheme from time to time.

As per RBI instructions “Every application must be accompanied by the ‘PAN Number’ issued by the Income Tax Department to the investor(s)’’ as the PAN number of the first/ sole applicant is mandatory.

Buying Gold Bonds from where?

The bonds are sold through banks (except small finance banks and payment banks), Stock Holding Corporation of India Limited (SHCIL), designated post offices, and recognised stock exchanges National Stock Exchange of India Limited and BSE.

Discount

A discount of Rs 50 per gram less than the nominal value is provided by the government, in consultation with RBI to those investors applying online, and where the payment against the application is made through digital mode. The RBI said, "For such investors, the issue price of Gold Bond will be Rs 4,682 per gram of gold".

Tenor

The tenor of the bond is for a period of 8 years with an exit option after the 5th year to be exercised on the next interest payment dates.

Who can invest in Gold Bonds?

Any individual who is a resident in India, Hindu undivided families, trusts, universities, and charitable institutions are eligible to invest in the sovereign gold bond scheme. These bonds are denominated in multiples of gram (s) of gold with a basic unit of 1 gram.

How is the price of SGB fixed?

The price of the bond is 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 for the last three working days of the week preceding the subscription period.

Minimum and maximum permissible investment

The minimum permissible investment is 1 gram of gold. The maximum limit of subscription is 4 kg for individuals, 4 kg for HUFs, and 20 kg for trusts and similar entities per fiscal (April-March).

Moneycontrol News
first published: Aug 30, 2021 09:09 am
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