The Reserve Bank of India (RBI) has announced the issue price for the Sovereign Gold Bond (SGB) under the September 2023 series, set at ₹5,923 per gram. Here are the essential details you need to know about this investment opportunity.
Subscription Period and Pricing
The Sovereign Gold Bond Scheme 2023-24 Series II is open for subscription from September 11 to September 15, 2023. The issue price of ₹5,923 per gram is based on the simple average of the closing price of gold (999 purity) during the last three working days preceding the subscription period (September 06, September 07, and September 08, 2023).
Discounted Prices for Digital Payments
Investors who apply online and complete their payment through digital channels will receive a discount of ₹50 per gram. This means that they can purchase SGBs at an issue price of ₹5,873 per gram.
Investment Limit and Tenure
SGBs are issued in multiples of one gram of gold, with a minimum investment of one gram and a maximum limit of 500 grams per individual per fiscal year (April to March). These bonds have an eight-year tenure and offer an annual interest rate of 2.5%, payable semi-annually in June and December. Upon maturity, the bonds are redeemed at the prevailing market price of gold.
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Investors can purchase SGBs through various channels, including banks, the Stock Holding Corporation of India Ltd (SHCIL), designated post offices, and recognized stock exchanges such as the NSE and the BSE.
The SGB scheme is available for purchase by resident individuals, Hindu Undivided Families (HUFs), trusts, universities, and charitable institutions.
For individuals and HUFs, the maximum investment limit is 4 kg of gold per fiscal year (April to March). This limit applies cumulatively across different tranches within the same financial year, including secondary market purchases.
The redemption value of an SGB is determined based on the simple average of the closing price of gold (999 purity) over the previous three working days, as reported by the India Bullion and Jewellers Association Ltd (IBJA). SGBs mature after eight years but can be redeemed prematurely from the fifth year with a penalty.
Investing in SGBs offers an attractive avenue to invest in gold with government backing and the benefit of annual interest payments. Additionally, the redemption value is linked to the prevailing market price of gold, ensuring investors receive a fair return on their investment. For more related news, please visit The Current Online.