The latest tranche of the Sovereign Gold Bond (SGB) scheme opens today on June 19 for a period of 5 days till June 23, 2023. SGBs are government securities denominated in grams of gold. The Bond is issued by the Reserve Bank of India on behalf of the government.
Where to invest?
If you want to invest in SGB, the issuing banks, designated Post Offices, agents will give provide with an application form. It is also available for download at the RBI's website. Banks may also offer online application services.
What is the issue price of Sovereign Gold Bond 2023-24 Series I?
The bonds nominal value for SGB 2023-24 Series I is 5,926 per gram of gold.
The bond's nominal value is based on the simple average of the closing price [published by the India Bullion and Jewellers Association Ltd (IBJA)] for gold of 999 purity on the last three working days of the week preceding the subscription period, namely June 14, June 15, and June 16, 2023.
What is the discounted price of SGB 2023-24 Series I?
The Reserve Bank has agreed to offer a discount of 50/- per gram less than the nominal value to investors who apply online and pay for the application via digital mode. The issue price of a Gold Bond for such investors will be Rs. 5,876 per gram of gold.
You Might Also Like:
What will be the redemption price
The redemption price will be in Indian Rupees based on simple average of closing price of gold of 999 purity of previous 3 business days published by IBJA.
Interest rate
The investors will be compensated at a fixed rate of 2.50 per cent per annum payable semi-annually on the nominal value.
Collateral
Bonds can be used as loan collateral. The loan-to-value (LTV) ratio must be fixed at the standard gold loan requirement that the Reserve Bank may from time to time impose.
Tenor
The bond will have an 8-year tenor with an exit option exercisable starting in the fifth year on the dates of interest payments.
Limit on buying SGB
The maximum amount that may be subscribed is 4 KG for individuals, 4 KG for HUF, and 20 KG for trusts and other similar entities every fiscal (April-March), as may be periodically announced by the Government.
The annual ceiling will include both secondary market purchases and bonds that were purchased at the government's initial issuance in various tranches.
Important FAQs to know
1. Are there any risks in investing in Sovereign Gold Bonds?
There may be a risk of capital loss if the market price of gold declines. However, the investor
does not lose in terms of the units of gold which he has paid for.
2. Who is eligible to invest in the SGBs?
Persons resident in India as defined under Foreign Exchange Management Act, 1999 are
eligible to invest in SGB. Hence, on www.icicidirect.com only resident individuals and HUFs
would be allowed to invest in SGBs. Other client categories like corporate, partnership firms, LLPs, trusts, etc. would not be allowed to invest.
3. Whether joint holding will be allowed?
The joint holders if any in the linked demat account would also be joint holders for
investment in SGB. For investment account holders without demat account, only single
holder option would be available.
