The Reserve Bank of India (RBI) announced a new tranche of the Sovereign Gold Bond (SGB) scheme will open on September 11 and declared that the price of the gold bonds has been set at Rs 5,293 per gram. The issue will remain open for bidding till September 15.
"The nominal value of the bond based on the simple average of closing price for gold of 999 purity of the last three working days of the week preceding the subscription period, i.e. September 6-8, works out to Rs 5,923 per gram of gold," RBI said.
Also Read: Sovereign Gold Bond Scheme: All that you must know before buying it
The RBI also announced a discount for online applicants to the scheme. A discount of Rs 50 per gram less than the nominal value will be given to those applying online and making the payment against the application through digital mode. The issue price of gold bond for online investors will be Rs 5,873 per gram of gold, according to RBI's announcement.
Sovereign gold bond scheme 2023-24 series 2 will be sold through banks, Stock Holding Corporation of India Ltd (SHCIL), designated post offices, and recognised stock exchanges — the National Stock Exchange and the Bombay Stock Exchange.
Also Read: How do Sovereign Gold Bonds compare with Gold ETFs and equity indices
SGBs provide an annual interest rate of 2.5 percent, biannually, in the months of June and December. SGBs have an eight-year tenure and can also be redeemed prematurely, beginning from the fifth year. However, there is a penalty for early redemption. In the first year of premature redemption, the penalty is one percent of the bond's nominal value, and this decreases to 0.5 percent for each subsequent year.
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