The government’s Sovereign Gold Bond (SGBs) programme will open for subscription six more times this financial year. A seventh tranche of the gold bond scheme – in which the RBI issues bonds linked to the market price of the yellow metal on behalf of government – will be available for investment on five days starting October 12, according to an official release. Launched in 2015 along with the Gold Monetisation Scheme, the Sovereign Gold Bond scheme provides gold-linked returns and an additional return of 2.5 per cent per annum. Wealth planners say gold bonds are an effective way to invest in non-physical gold.
Here are key things to know about the Sovereign Gold Bond (SGB) scheme:
|Tranche||Date of Subscription||Date of Issuance|
|2020-21 Series VII||October 12-16, 2020||October 20, 2020|
|2020-21 Series VIII||November 9-13, 2020||November 18, 2020|
|2020-21 Series IX||December 28-January 1, 2021||January 5, 2021|
|2020-21 Series X||January 11-15, 2021||January 19, 2021|
|2020-21 Series XI||February 1-5, 2021||February 9, 2021|
|2020-21 Series XII||March 1-5, 2021||March 9, 2021|
|Source: Ministry of Finance|
The gold bonds come with a maturity period of eight years, with an option to exit the investment after the first five years.
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?)
The scheme is open to resident individuals, Hindu Undivided Families (HUFs), trusts, universities and charitable institutions.
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 (1,000 units) each per financial year. For trusts and similar entities, an upper limit of 20 kilograms per financial year is applicable.
The price of the gold bonds is calculated based on the spot price of gold as provided by the Mumbai-based India Bullion and Jewellers Association (IBJA). For the seventh tranche, a price of Rs 5,051 per unit is applicable, the finance ministry said in a separate statement.
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.
The interest earned from gold bonds is taxable. However, the capital gains arising out of redemption are exempted for individual investors.