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Sovereign gold bonds open for subscription today: Things to know

The eighth series of Sovereign Gold Bond Scheme 2021-21 will be thrown open for subscription today. The scheme will close on November 13.

India TV Business Desk Edited by: India TV Business Desk
New Delhi Updated on: November 09, 2020 9:30 IST
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Sovereign gold bonds open for subscription today: Things to know

The eighth series of Sovereign Gold Bond Scheme 2021-21 will be thrown open for subscription today. The scheme will close on November 13. With the tranche set to roll out, the government has fixed the issue price for the Sovereign Gold Bond at Rs 5,177 per gram of gold (999 purity). In a move ahead of Dhanteras and Diwali, the government has also decided to offer 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. The Sovereign Gold Bond is issued by the Reserve Bank of India on behalf of the Government of India. 

SOVEREIGN GOLD BONDS OPEN FOR SUBSCRIPTION: THINGS TO KNOW

What are sovereign gold bonds

Sovereign gold bonds are government securities denominated in grams of gold. They are substitutes for holding physical gold. Investors will have to pay the issue price in cash and the bonds will be redeemed in cash on maturity. 

What are the benefits of buying SGB

The Sovereign Gold Bond offers a superior alternative to holding gold in physical form. By opting for SGBs, the risks and costs of storage are eliminated. Also, investors are assured of the market value of gold at the time of maturity and periodical interest. The bonds are free from issues like making charges and purity in the case of gold in jewellery form. Since the bonds are held in the books of the RBI or in demat form, it helps eliminate the risk of loss of scrip etc. 

ALSO READ | Modi government offering discount on gold ahead of Dhanteras-Diwali, invest now to get extra 2.5% return

 

What are the risks involved in SGB investment

A risk of capital loss could loom over you if the market price of gold declines. However, the investor does not lose in terms of the units of gold which the person has paid for. 

Who is eligible 

Those investing in the Sovereign Gold Bonds should be a resident in India as defined under Foreign Exchange Management Act, 1999. Eligible investors include individuals, HUFs, trusts, universities and charitable institutions. Individual investors with subsequent change in residential status from resident to non-resident may continue to hold sovereign gold bonds till early redemption/maturity. 

What is the minimum/maximum permissible investment

The minimum permissible investment will be 1 gram of gold and the maximum limit of subscription shall be 4 kg for individuals, 4 kg for HUF and 20 kg for trusts and similar entities per fiscal (April-March). 

How will the gold bond be sold 

The gold bond will be sold through banks (except Small Finance Banks and Payment Banks), Stock Holding Corporation of India (SHCIL), designated post offices, and recognised stock exchanges (NSE and BSE).

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