RBI on Friday announced the latest tranche issue price for Sovereign Gold Bonds on behalf of the Central Government for the Scheme 2022-23 of Sovereign Gold Bonds (SGB) which are securities. Its subscriptions will be opened for five days which begins in Monday, December19,2022 and has been set at 5,409 rupees on per gram of gold.
SGB’s are also a substitute for physical gold. This is an instrument which exists in the market on a long term basis. The SGB’s trading takes place through banks, assigned post-offices, Stock Holding Corporations of India (SHCI), National Stock Exchange (NSE) and the Bombay Stock Exchange (BSE). Person’s eligible to buy the gold bonds are Indian resident, individuals, groups and minors.
Invest in Gold Bonds
SGB scheme was brought in by the government in November 2015 in order to bring down the demand of physical gold and to make a part of the domestic savings move from the gold purchase market to the financial market. However, the allotment of SGB’s are done in portions for a limited period of time. SGB’s are a tenured for a minimum of 8 years but the buyers have a choice to exit the scheme on the fifth, sixth and seventh year from the time of issuance of the bond. These bonds are also redeemed on the interest payment after 5 years. The investors can buy these bonds through authorized SEBI brokers and they also have an option to hold these bonds in a physical or a dematerialized format. The minimum investment in the SGB is 1 gram pre person and the maximum subscription is 4Kg per person in each fiscal year.
How to invest in sovereign gold bonds online?
Buy gold bonds online by following the steps mentioned below
- Login and Complete KYC
- Enter quantity of gold/ Enter Investment Amount
- Transfer funds using payment gateway
- Bid Clearance from Stock Exchange and RBI
- Gold bond is now allotted and credited to Demat Account
SOVERIGN GOLD BOND is now yours.
KYC documentation requirement:
- PAN Card
- Address Proof
- Demat Details
- Details of Bank Account
How to Reap Tax Benefit on investment on gold bonds? How much money is made on maturity of gold bonds?
Interest rate of 2.5% p.a. (payable semiannually) is paid to the investors and Zero tax on Capital gains is grasped on maturity with no TDS.
Gold bonds shall be redeemed at maturity on the fundament of simple average of closing price of 999 gold purity of the previous 3 business days, published by IBJA (Indian Bullion and Jewelers Association Ltd.)
How to exit Investment on Gold Bond?
In case an investor wants to withdraw its investment from the gold bond scheme investors can approach their concerned institutions which they used at the time of purchasing the bond. This redemption request can only be entertained if the investor approaches the concerned bank /institution at least one day before the coupon payment date. The proceeds will be initiated and credited to the customer’s bank account which they provided at the time of application of the bond.
Exit option on gold bonds are possible after 5th year of purchase and investor can withdraw it on the next payment interest date.
If the market price of gold declines, there might me a risk of capital loss. However, the investor dose not lose in terms of units of gold which the investor has paid for.
Have a nice and wise investment in gold bonds!
You can also invest in sovereign gold bonds with SMIFS Limited