The Sovereign Gold Bond scheme opened for subscription underneath its seventh tranche of the 12 months on Monday. Bonds underneath the SGB programme – by which the RBI points bonds linked to the market value of the yellow steel on behalf of presidency – can be found at Rs 5,051 per unit, which is equal to the market worth of 1 gram of gold. After the present tranche, the Sovereign Gold Bond scheme will open for subscription 5 extra occasions until March 2020. Launched in 2015 together with the Gold Monetisation Scheme, the Sovereign Gold Bond scheme offers gold-linked returns and a further return of two.5 per cent every year. The SGB scheme is an efficient solution to put money into non-physical gold, say wealth planners.
Here are 10 issues to know in regards to the Sovereign Gold Bond (SGB) scheme:
Important Dates: The seventh instalment of the SGB programme open for subscription on Monday, October 12, until October 16.
Maturity Period: Gold bonds underneath the SGB scheme include a maturity interval of eight years, which suggests the funding is locked in for a interval of eight years. However, there’s an exit choice after the primary 5 years.
Interest Rate: Besides the return linked to the market value of the yellow steel, the gold bonds present a further return of two.5 per cent within the type of curiosity. This curiosity is payable twice a 12 months.
Who Can Buy: Resident people, Hindu Undivided Families (HUFs), trusts, universities and charitable establishments can put money into the gold bonds.
Investment Limit: Gold bonds may be bought within the multiples of 1 unit, as much as sure thresholds for various traders. For retail traders, the higher restrict is 4 kilograms – or 4,000 bonds.
Issue Price: Each gold bond (equal to 1 gram of gold) is priced at Rs 5,051 underneath the seventh instalment. The fee is arrived at on the premise of spot costs offered by the Mumbai-based India Bullion and Jewellers Association (IBJA).
Online Discount: A reduction of Rs 50 per unit is offered on on-line purchases (utilizing digital modes of cost). Therefore, underneath the present difficulty, a problem value of Rs 5,001 per unit is relevant to these buying the bonds on-line.
How To Buy: The gold bonds may be bought via business banks, the Stock Holding Corporation, designated submit workplace branches, and inventory exchanges BSE and NSE.
Tax Implications: The curiosity earned from gold bonds is taxable. However, the capital positive factors arising out of redemption are exempted for particular person traders.
“Investors looking to put their money in gold should take this route to avail dual benefits – avoid any overhead cost while buying/selling as compared to investing in physical gold, and the assured 2.5 per cent interest payable per annum. Any portfolio should consist of gold anywhere in the range of 10-15 per cent or based on the risk-taking appetite of the investors,” stated Nish Bhatt, founder and CEO of funding consulting agency Millwood Kane International.