Gold Bond Scheme: The new series of the Sovereign Gold Bond (SGB) Scheme opened for subscription on Monday. This is the third tranche in Fiscal Year 2020 and the subscription closes on August 9. “The issue price of the Bond during this subscription period shall be Rs 3,499 per gram with settlement date August 14, 2019,” the finance ministry said in a statement. It will close on August 9. The bonds will be issued on August 14, 2019.
The government is coming out with sovereign gold bonds at a time when domestic gold prices have hit records high.The issue price for Sovereign Gold Bonds 2019-20-Series-III is Rs 3,499 per gram and the government is offering a discount of Rs 50 per gram for the investors applying online. For such investors, the issue price will be Rs 3,449 per gram.
The nominal value of the bond is based on the simple average closing price for gold of 999 purity as published by the India Bullion and Jewellers Association Ltd (IBJA) over the last three business days of the week preceding the subscription period (July 31 to August 2, 2019). The series coincides with a spike in the yellow metal’s prices. Gold prices surged Rs 800 to hit an all-time high of Rs 36,970 per 10 gram at the bullion market on Monday.
If you want to invest in gold as an asset class, then investing via sovereign gold bond is a good option, say financial planners. These gold bonds can be purchased either online or through offline modes – banks, post offices and other designated agents such as Sebi authorized trading members.
Gold Bond Scheme: Things to know
- The gold bonds are issued in denominations of one gram and in multiples thereof.
- Sovereign gold bonds pay an interest at the rate of 2.50% per annum on the issue price. Interest is credited semi-annually to the investor’s account.
- The maximum limit of subscription of 4 kg for individuals and Hindu Undivided Family (HUF) per fiscal year, while that for trusts and similar entities is 20 kg.
- The maturity of sovereign gold bond is 8 years. The redemption price will be linked to the prevailing price of gold.
- The minimum investment amount is 1 gram.
- The last interest will be payable on maturity along with the principal.
- Premature redemption of sovereign gold bond is permitted after fifth year of the date of issue of the