Sovereign Gold Bond in India Opens for Subscription Today

SEATTLE (Scrap Monster): The 12^th tranche of Sovereign Gold Bonds (SGB) 2020-’21 will open for subscription today in India, said the latest press release by the Reserve Bank of India (RBI). The issue will close on Friday, March 5^th. The certificates of bond purchases will be issued on 9^th March. 2021.

According to RBI, the issue price of the new series has been fixed at INR 4,662 per gram of gold. Additionally, investors who apply online and make payment through digital mode will be offered a discount of INR 50 per gram from the nominal value. For such investors, the issue price has been fixed at INR 4,612 per gram. The issue price of the bonds hit the lowest level in nearly 10 months.

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The bonds will have a maturity period of eight years, with an exit option after the lock-in period of 5 years. The exit before five years could be made by selling them on stock exchanges at the prevailing gold price. The investors will be paid interest at a fixed rate of 2.5% per annum on the nominal value, which will be paid semi-annually.

Unlike gold coins and bars, goods and services tax (GST) will not be levied on SGBs. Also, there are no making charges. Furthermore, SGBs could be used as collaterals for loans.

As per financial experts, SGBs will help investors to diversify their portfolio. Ideally, up to 15% of one’s portfolio should be invested in gold.