Reserve Bank of India Sovereign Gold Bond Scheme to open on November 29

Reserve Bank of India Sovereign Gold Bond Scheme to open on November 29 

The Reserve Bank of India (RBI) has announced that the next round of Sovereign Gold Bond Scheme will be open for subscription on November 29. According to a statement by the RBI, subscription for the 5-day long Series VIII (2021-22) of the Gold Bond Scheme will close on December 3, 2021, and the date of issuance of bonds has been fixed as December 7, 2021.

According to personal finance experts, the RBI Gold Bonds are worth considering as an investment option since these bonds have the backing of the government. 

As the subscription period is fast approaching, here is the important details related to the gold bond scheme. 

Sovereign Gold Bond Scheme

What is Sovereign Gold Bond (SGB)? 

SGBs or gold bonds are government securities denominated in grams of gold. They are substitutes for holding physical gold. Investors have to pay the issue price in cash and the bonds will be redeemed in cash on maturity. The Bond is issued by Reserve Bank on behalf of Government of India. 

Who is eligible to invest in the SGBs? 

Person's resident in India as defined under Foreign Exchange Management Act, 1999 are eligible to invest in SGB. 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 SGB till early redemption/maturity. 

What is the rate of interest and how will the interest be paid? 

The Bonds bear interest at the rate of 2.50 per cent (fixed rate) per annum on the amount of initial investment. Interest will be credited semi-annually to the bank account of the investor and the last interest will be payable on maturity along with the principal. 

At what price the bonds are sold? 

The nominal value of Gold Bonds shall be in Indian Rupees fixed on the basis of simple average of closing price of gold of 999 purity, published by the India Bullion and Jewelers Association Limited, for the last 3 business days of the week preceding the subscription period. 

What is the tenor?

The tenor of the Bond will be for a period of 8 years with exit option after 5th year to be exercised on the next interest payment dates.

What is the minimum and maximum size limit?

Minimum permissible investment will be 1 gram of gold. While the maximum limit of subscription shall be 4 KG for individual, 4 Kg for HUF and 20 Kg for trusts and similar entities per fiscal (April-March) notified by the Government from time to time. A self-declaration to this effect will be obtained. The annual ceiling will include bonds subscribed under different tranches during initial issuance by Government and those purchased from the Secondary Market.

What are the advantages of gold bonds vis-a-vis physical gold or jewellery?

The quantity of gold for which the investor pays is protected as he receives the ongoing market price at the time of redemption/ premature redemption. According to the RBI, the scheme offers a superior alternative to holding gold in physical form as the risks and costs of storage are eliminated. 

Investors are assured of the market value of gold at the time of maturity and periodical interest. SGB is free from issues like making charges and purity in the case of gold in jewellery form. The bonds are held in the books of the RBI or in demat form eliminating risk of loss of scrip etc.

Are there any risks in investing in SGBs?

There may be a risk of capital loss if the market price of gold declines. However, the investor does not lose in terms of the units of gold which he has paid for.

How are returns from gold bonds taxed? 

According to RBI, the interest on gold bonds shall be taxable as per the provision of the Income Tax Act, 1961. However, the capital gains tax arising on redemption of sovereign gold bonds at maturity has been exempted.

Who are the authorized agencies to sell the SGBs?

Bonds are sold through offices or branches of Nationalised Banks, Scheduled Private Banks, Scheduled Foreign Banks, designated Post Offices, Stock Holding Corporation of India Ltd. (SHCIL) and the authorised stock exchanges either directly or through their agents. By purchasing online, one can get a discount of Rs 50 per gram of gold.

What are the payment options?

Payment for the Bonds will be through cash payment (up to a maximum of Rs 20,000) or demand draft or cheque or electronic banking.

What are the Know-Your-Customer (KYC) norms? 

Every application must be accompanied by the ‘PAN Number’ issued by the Income Tax Department to the investor(s).

Source :

नोट :- हमारे वेबसाइट पर ऐसी जानकारी रोजाना आती रहती है, तो आप ऐसी ही सरकारी योजनाओं की जानकारी पाने के लिए हमारे वेबसाइट से जुड़े रहे।


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