Government-run Sovereign Gold Bonds (SGBs) will open for subscription on Monday, July 6 in a fourth instalment to date this monetary 12 months.Issued by the Reserve Bank of India (RBI) on behalf of the federal government, the gold bonds are a part of the central authorities’s market-borrowing programme. Each gold bond represents the worth equal to at least one gram of gold. The subscription for the gold bonds – the Sovereign Gold Bond 2020-21 scheme – is about to open as soon as once more at a time when the fast unfold of the coronavirus (COVID-19) pandemic has rattled the monetary markets across the globe, however despatched gold charges to document ranges with a rise within the attraction of the yellow steel as a safe-haven.
Here are 10 key issues to know in regards to the Sovereign Gold Bond scheme:
Interest Rate: A hard and fast charge of two.5 per cent every year is relevant on the Sovereign Gold Bonds, payable semi-annually. (Also Read: Physical Gold, Gold ETFs Or Gold Bonds: How To Approach Gold?)
Who Can Buy: Resident people, Hindu Undivided Families (HUFs), trusts, universities and charitable establishments can put money into the SGB scheme.
Issue Price: The concern value for the fourth tranche of the gold bond scheme is mounted at Rs 4,852 per gram, the RBI stated on Friday. The value is decided on the premise of a easy common of the closing value 999-purity gold revealed by the Mumbai-based India Bullion and Jewellers Association (IBJA) for the final three working days of the week previous subscription.
Discount: Online subscribers paying by way of the digital mode get a reduction of Rs 50 on each gram of gold. The similar methodology is used for figuring out the redemption value.
Important Dates: The fourth tranche of the scheme will stay open for 5 consecutive days beginning July 6. The gold bond scheme will subsequent open for subscription in August and September.
Financial consultants suggest gold bonds as an efficient solution to purchase gold as an funding. “A sovereign gold bond is perhaps one of the best options for investors who want gold in their portfolio and do have a long-term investment horizon… It is always advisable to have exposure to some amount of gold in an investment portfolio for hedging and diversification purposes and the lockin period serves that purpose very well,” stated Rahul Agarwal, director at Delhi-based monetary providers agency Wealth Discovery.
How To Invest: The SGBs are bought by way of business banks, the Stock Holding Corporation, designated submit workplaces, and inventory exchanges BSE and NSE. The bonds are held in RBI books or in demat kind.
Investment Limit: A minimal of 1 gram and a most of 4 kilograms of gold could be acquired by eligible people and HUFs in a monetary 12 months. Trusts and related entities should buy as much as 20 kilograms in a monetary 12 months.
Lock-In: The gold bond scheme comes with a tenor of eight years, with an exit choice after the fifth 12 months. The choice could be exercised on curiosity fee dates.
Tax Implication: The curiosity on gold bonds is taxable. However, the capital beneficial properties arising out of redemption are exempted for particular person traders.
|Tranche||Date of Subscription||Date of Issuance|
|2020-21 Series I||April 20-24, 2020||April 28, 2020|
|2020-21 Series II||May 11-15, 2020||May 19, 2020|
|2020-21 Series III||June 8-12, 2020||June 16, 2020|
|2020-21 Series IV||July 6-10, 2020||July 14, 2020|
|2020-21 Series V||August 3-7, 2020||August 11, 2020|
|2020-21 Series VI||August 31-September 4, 2020||September 8, 2020|
|(Source: Ministry of Finance)|
(The SGB scheme 2020-21 first hit the markets in April 2020)