SEATTLE (Scrap Monster): The Centre has floated the latest tranche of Sovereign Gold Bond Scheme 2022-23 on Monday, which will be open for subscription till Friday, December 23. SGBs, or Sovereign Gold Bonds, are issued by the Reserve Bank of India (RBI) on behalf of the Centre as an alternative to buying physical gold.
SGBs can be defined as bonds, which are government securities expressed in terms of grams of gold and are issued a couple of times in a given financial year. Under the scheme, investors have to pay the issue price in cash. On maturity, the investors can redeem bonds in cash. The scheme was first floated in 2015 by the Indian government. The lock-in period for the scheme is 8 years.
These gold bonds can be sold only to resident individuals, Hindu Undivided Families (HUFs), trusts, universities, and charitable institutions.
The last and fourth tranche of Sovereign Gold Bonds (SGBs) this fiscal will be issued on March 14, 2023.
This time, the RBI has fixed the issue price of the bond at Rs 5,409 per gram. The interest rate offered on these bonds is 2.50 per cent per annum on the amount of initial investment which investors pay to buy the bond. The interest is paid every six months to the bank account of the investor. But the last interest is paid at maturity along with the principal amount.
The lock-in period for SGB is 8 years. There is an exit option available in the fifth year, which can be used on interest payment days.
Investors should note that though the RBI has fixed the issue at Rs 5,409 per gram, subscribers can get a discount if they apply online and make digital payments. They can avail Rs 50 per gram discount on the bond. So, if you are applying online and buying one gram of gold through SGB, then you will have to pay Rs 5,359 through UPI or other digital payment modes instead of Rs 5,409.
As per the Centre’s directive, the government in consultation with RBI has decided to allow a discount of Rs 50 per gram less than the nominal value to those investors applying online, and the payment against the application is made through digital mode.
Investors can buy Sovereign Gold Bonds in denominations of one gram of gold and in multiples. Investors should buy a minimum of one gram of gold to invest in the SGB scheme. The maximum limit of subscription is 4 kg for individuals, 4 kg for Hindu Undivided Families (HUF). For trusts and similar entities, the maximum limit is 20 kg this fiscal. The government can revise this limit from time to time.
Investors can buy Sovereign Gold Bonds from authorised post offices, Scheduled Commercial Banks, Stock Holding Corporation of India Limited (SHCIL), Clearing Corporation of India Limited (CCIL), and stock exchanges NSE and BSE.
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