Sovereign Gold Bonds new issue: The fourth tranche of the Sovereign Gold Bonds (SGB) is now open for subscription. Investors can purchase the bonds at a price of Rs 6,263 per gram. Additionally, those who apply online will receive a discount of Rs 50 per gram, making the issue price Rs 6,213 per gram. The subscription period for the SGB ends on February 16, and the bonds will be issued on February 21.
Payment for the SGB can be made through cash payment up to a maximum of Rs 20,000, or via demand draft, cheque, or electronic banking, according to an ET report.
The price of the SGB is determined based on the average closing gold price of 999 purity over the previous three business days, as published by the India Bullion and Jewellers Association Ltd (IBJA). For this tranche, the average price is calculated from February 7 to February 9, 2024.
The Reserve Bank of India (RBI) had previously announced two fresh issues of the Sovereign Gold Bond Scheme for the year 2023-24, with one in December and the current tranche in February.
The sale of SGBs is limited to resident individuals, HUFs, Trusts, Universities, and Charitable Institutions. The bonds are denominated in multiples of grams, with a minimum investment of one gram and a maximum limit of 4 kg for individuals, 4 kg for HUFs, and 20 kg for trusts and similar entities per fiscal year. In case of joint holding, the investment limit of 4 kg applies to the first applicant.
The tenor of the bonds is 8 years, with an option for premature redemption after the 5th year, which can be exercised on the interest payment date.
The Sovereign Gold Bond Scheme was introduced in November 2015 to encourage financial savings and reduce the demand for physical gold.
In addition, the RBI has announced the premature redemption of the SGB 2018-19 Series VI bonds at a price of Rs 6,263 per gram. Premature redemption is allowed after the completion of the fifth year from the date of issue. The redemption price is based on the average closing gold price of 999 purity over the previous three business days, from February 7 to February 9, 2024.
Payment for the SGB can be made through cash payment up to a maximum of Rs 20,000, or via demand draft, cheque, or electronic banking, according to an ET report.
The price of the SGB is determined based on the average closing gold price of 999 purity over the previous three business days, as published by the India Bullion and Jewellers Association Ltd (IBJA). For this tranche, the average price is calculated from February 7 to February 9, 2024.
The Reserve Bank of India (RBI) had previously announced two fresh issues of the Sovereign Gold Bond Scheme for the year 2023-24, with one in December and the current tranche in February.
The sale of SGBs is limited to resident individuals, HUFs, Trusts, Universities, and Charitable Institutions. The bonds are denominated in multiples of grams, with a minimum investment of one gram and a maximum limit of 4 kg for individuals, 4 kg for HUFs, and 20 kg for trusts and similar entities per fiscal year. In case of joint holding, the investment limit of 4 kg applies to the first applicant.
The tenor of the bonds is 8 years, with an option for premature redemption after the 5th year, which can be exercised on the interest payment date.
The Sovereign Gold Bond Scheme was introduced in November 2015 to encourage financial savings and reduce the demand for physical gold.
In addition, the RBI has announced the premature redemption of the SGB 2018-19 Series VI bonds at a price of Rs 6,263 per gram. Premature redemption is allowed after the completion of the fifth year from the date of issue. The redemption price is based on the average closing gold price of 999 purity over the previous three business days, from February 7 to February 9, 2024.
Sovereign Gold Bond (SGB) 2023-24 Series IV Details:
- Subscription Period: February 12 – February 16, 2024
- Issuance Date: February 21, 2024
- The SGB 2023-24 Series IV is priced at Rs 6,263. An online payment processing fee of Rs 50 will be subtracted, resulting in an adjusted issue price of Rs 6,213.
- Investors in the current series receive a fixed interest rate of 2.5% per annum, paid semi-annually on the nominal value. This fixed interest remains unaffected by any changes in the capital value of the Gold Bonds.
- Bonds will be available for purchase through banks, Stock Holding Corporation of India Limited (SHCIL), designated post offices as may be notified, and recognized stock exchanges, including the National Stock Exchange of India Ltd and Bombay Stock Exchange Ltd, either directly or through agents.
Benefits of Sovereign Gold Bond Schemes
Below are the advantages of SGB, as outlined on the HDFC Bank website:
- Attractive Interest with asset appreciation opportunity (2.5%)
- Redemption linked to Gold Price
- Elimination of risk and cost of storage
- Exemption from Capital gains tax if held till maturity
- Hassle-free: Ownership of gold without physical possession (No risks and storage costs)
- Tax treatment: Capital gains tax upon redemption of SGB for an individual is exempted. Indexation benefits provided for long-term capital gains upon bond transfer.
- Tradability: Bonds will be tradable on stock exchanges within a fortnight of issuance as notified by the RBI.
- Transferability: Bonds can be transferred by executing an Instrument of transfer in accordance with the provisions of the Government Securities Act.