Sovereign Gold Bond Scheme: The government-run Sovereign Gold Bond 2020-21 programme opened for subscription for the fourth time this financial year on July 6, and will be available till Friday, July 10. After the current tranche, in which bonds will be issued on July 14 (also known as settlement date), the gold bond scheme will open for subscription for five days each in August and September. Financial experts say accumulation of gold in small quantities is suitable for long-term investors. (Also Read: Should You Invest? | How To Invest In Sovereign Gold Bonds)
Date of Subscription
Date of Issuance
2020-21 Series V
August 3-7, 2020
August 11, 2020
2020-21 Series VI
August 31-September 4, 2020
September 8, 2020
(Source: Ministry of Finance)
(The SGB scheme 2020-21 first hit the markets in April 2020)
Here are key details on the Sovereign Gold Bond programme:
What Is Sovereign Gold Bond Scheme?
The government-run SGB scheme - wherein the Reserve Bank of India issues gold bonds on behalf of Government of India - enables the public to purchase bonds linked to the market price of the yellow metal and even earn interest on their investment.
Who Can Invest?
Resident individuals, Hindu Undivided Families (HUFs), trusts, universities and charitable institutions can purchase the gold bonds under the scheme.
Gold Bond Price
The fourth series of sovereign gold bonds is available at an issue price of Rs 4,852 per gram.
Gold Bond Discount
A discount of Rs 50 per gram is allowed to investors making the purchase online through a digital mode of payment. The issue price for online purchasers after the discount is Rs 4,802 per gram.
(Also Read: Which Route Is Best To Invest In Non-Physical Gold?)
Sovereign Gold Bonds come with a maturity period - or lock-in - of eight years, with an exit option after the fifth year. The exit option can be utilised on interest payment dates.
A minimum of one gram and a maximum of four kilograms (4,000 grams) can be purchased by eligible individuals and HUFs in a financial year. Trusts and similar entities can purchase up to 20 kilograms.
Sovereign Gold Bonds fetch interest at a fixed rate of 2.50 per cent per annum, which is payable semi-annually.
Where To Buy
Investors can park their funds in the gold bonds through multiple routes. Sovereign Gold Bonds can be purchased through nationalised and private banks, designated post office branches, stock exchanges BSE and NSE, and the Stock Holding Corporation.
Interest is taxable, however the capital gains - arising out of redemption - are exempt for individual investors.