Sovereign Gold Bond Scheme open: Get gold at a discount

The first tranche of Sovereign Gold Bond or SGB scheme for the current fiscal opened for subscription and here's everything you need to know about the scheme:

Issue price and interest rate: The issue price has been fixed at ₹5,091 per gram of gold. Investors are paid a fixed rate of interest of 2.5% per annum payable semi-annually on the nominal value.

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Main dates: The Reserve Bank of India’s (RBI’s) sovereign gold bond scheme has opened for application on June 20 and it will remain open for application till June 24. This is the first tranche for the SGB Scheme 2022-23. According to media reports, the scheme’s next issue will open on August 22, 2022, and close on August 26.

What are Sovereign Gold Bond scheme: Under the sovereign gold bond scheme, the RBI issues the bonds on behalf of the government. These bonds are sold through banks, Stock Holding Corporation of India (SHCIL), Clearing Corporation of India (CCIL), post offices, and stock exchanges – National Stock Exchange of India (NSE) and BSE.

The scheme was launched in November 2015 with an objective to reduce the demand for physical gold and shift a part of the domestic savings – used for the purchase of gold – into financial savings.

The issue price has been fixed at ₹5,091 per gram of gold.

Who Can Invest: Resident individuals, Hindu Undivided Families (HUFs), trusts, universities and charitable institutions can buy the bonds.

Tenure: The tenure of the SGB will be for a period of eight years with an option of premature redemption after fifth year to be exercised on the date on which interest is payable.

How To Buy: The bonds will be sold through commercial banks, Stock Holding Corporation of India Limited (SHCIL), Clearing Corporation of India Limited (CCIL), designated post offices (as may be notified), National Stock Exchange and BSE, either directly or through agents. The bonds will be issued on on June 28.

Minimum & Maximum Size: Minimum permissible investment will be one gram of gold, while the maximum limit of subscription shall be 4 kg for individual, 4 kg for HUF and 20 kg for trusts and similar entities per fiscal year (April-March) notified by the government from time to time. A self-declaration to this effect will be obtained. The annual ceiling will include SGBs subscribed under different tranches, and those purchased from the secondary market, during the fiscal year.