The Reserve Bank of India has once again opened the subscription of the Sovereign Gold Bond scheme for the financial year 2023-24. The issue price for the current tranche has been fixed at ₹5,923.
SGBs are a government-backed investment instrument that offers investors the opportunity to invest in gold without having to physically hold it.
The bonds are denominated in grams of gold and are priced at a slight discount to the prevailing market price of gold. Investors earn a fixed interest of 2.50% per annum on the amount invested, which is paid semi-annually.
SGBs are a good investment option for those who want to invest in gold but do not want to bear the hassle of storing and insuring physical gold.
They are also a good option for those who want to diversify their investment portfolio and reduce their risk.
RBI mentions: “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.”
There is an additional discount of ₹50 for investors who are applying for the scheme online and making payments through digital mode.
RBI states: ”Government of India, in consultation with the Reserve Bank, has decided to offer a discount of ₹50/- per gram less than the nominal value to those investors applying online and making the payment against the application through digital mode. For such investors, the issue price of Gold Bond will be ₹5,873/- (Rupees Five thousand eight hundred and seventy three only) per gram of gold.”
What Is Sovereign Gold Bond Scheme?
The Sovereign Gold Bond (SGB) Scheme is a government-backed investment scheme that allows investors to buy gold without having to hold it physically. The bonds are denominated in grams of gold and are priced at a slight discount to the prevailing market price of gold.
The SGB Scheme was launched by the Government of India in 2015 as a way to encourage investment in gold and reduce the demand for physical gold.
How do Sovereign Gold Bonds Work?
SGBs are issued by the Reserve Bank of India on behalf of the Government of India. The bonds are available for subscription in tranches throughout the year. The issue price of the bonds is fixed at a slight discount to the prevailing market price of gold. The discount is typically around 2.5%.
Investors can buy SGBs in multiples of 1 gram of gold. The minimum investment is one gram and the maximum investment limit for individuals is 4 kg per financial year. The bonds can be held in physical or demat form.
The interest on SGBs is paid semi-annually at a fixed rate of 2.50% per annum. The interest is compounded annually.
SGBs have a maturity period of 8 years. On maturity, the investor receives the amount invested, along with the interest accrued. The bonds can also be redeemed before maturity, but the redemption price will be linked to the prevailing market price of gold on the redemption date.
Categories: Trends
Source: tiengtrunghaato.edu.vn