Sovereign Gold Bonds Open For Subscription Till Friday. Here's All You Need To Know
An eighth tranche of the government's Sovereign Gold Bond programme opened for subscription on Monday, for a period of five days till Friday. Under the gold bond scheme, the RBI issues interest-paying bonds linked to the market price of the yellow metal. After the current series, the gold bond scheme will be available four times for five days each till March 2021. For the eighth instalment of the gold bond scheme, an issue price of Rs 5,177 per unit, equivalent to the value of one gram of gold, is applicable.
Here are some key details about the government-run Sovereign Gold Bond scheme:
Important Dates
The eighth tranche of the gold bond scheme, which opened for subscription on Monday, November 9, will be available for investing till Friday. Applications will be settled on November 18.
Discount
A discount of Rs 50 per unit is applicable for those investing in the gold bonds online. Therefore, a price of Rs 5,127 is applicable in such cases. (Also Read: Here Is How Sovereign Gold Bond Price Is Calculated)
Term
The gold bonds come with a maturity period of eight years, with an option to exit after the first five years.
Interest Rate
A fixed rate of 2.5 per cent per annum is applicable on the Sovereign Gold Bond scheme, payable semi-annually. (Also Read: Physical Gold, Gold ETFs Or Gold Bonds: How To Approach Gold?)
Eligible Investors
The scheme is open to resident individuals, Hindu Undivided Families (HUFs), trusts, universities and charitable institutions.
Investment Limit
Gold bonds can be purchased in the multiples of one unit, up to certain thresholds for different investors. The upper limit for retail investors and HUFs is 4 kilograms (4,000 units) each per financial year.
Discount
Those purchasing the bonds through an online mode - using a digital mode of payment - get a discount of Rs 50 on each unit, which is equivalent to the value of one gram of gold.
How To Invest
The SGBs are sold through commercial banks, the Stock Holding Corporation, designated post offices, and stock exchanges BSE and NSE. The bonds are held in RBI books or in demat form.
Tax
The interest earned from gold bonds is taxable. However, the capital gains arising out of redemption are exempted for individual investors.
