Sovereign Gold Bond Latest Tranche: Who Can Invest, Issue Price And Discounted Price

Sovereign Gold Bonds (SGBs) have gained popularity as a reliable investment option for individuals looking to diversify their portfolios and capitalize on the potential of gold. Backed by the Government of India, these bonds offer a unique opportunity for investors to own gold in a non-physical form while earning an assured interest rate.

A subscription period for the most recent tranche of the Sovereign Gold Bond (SGB) scheme begins on June 19 and lasts for 5 days until June 23, 2023. Let's take a closer look at who can invest, the issue price, and the discounted price of these bonds.

What is a Sovereign Gold Bond (SGB)?

The Sovereign Gold Bond (SGB) scheme is a government-backed investment program launched by the Reserve Bank of India (RBI) on behalf of the Government of India. It offers individuals and other entities a unique opportunity to invest in gold in a non-physical form. Under this scheme, investors can purchase gold bonds issued by the government, which represent ownership of a specified quantity of gold.

Who is eligible to invest in the SGBs?

• Investors in SGB must be Indian citizens.
• Eligible investors include, but are not limited to, individuals, HUFs, trusts, academic institutions, and nonprofit organisations.
• Even after switching from resident to non-resident status, individual investors may hold SGB until early redemption or maturity.

What is the issue price of Sovereign Gold Bond 2023-24 Series I?

For the SGB 2023-24 Series I, the nominal value of the bond is set at 5,926 per gram of gold. This value is determined by taking the simple average of the closing price, as published by the India Bullion and Jewellers Association Ltd (IBJA), for gold with 999 purity over the last three working days of the week prior to the subscription period. Specifically, for this series, the relevant dates are June 14, June 15, and June 16, 2023.

Discounted price of SGB 2023-24

The Reserve Bank has decided to give investors who apply online and pay for the application using digital means a discount of 50/- per gramme less than the nominal pricing. Such investors will pay Rs. 5,876 for each gramme of gold when purchasing a Gold Bond.

Why to purchase SGB?

Investors in Sovereign Gold Bonds (SGBs) enjoy the advantage of receiving the prevailing market price of gold at the time of redemption or premature redemption, ensuring that the quantity of gold they pay for remains protected. This feature makes SGBs an excellent alternative to holding physical gold, as it eliminates the risks and costs associated with storage. Additionally, investors can rest assured knowing that they will receive the market value of gold at maturity, along with periodic interest payments. Unlike gold in jewelry form, SGBs do not incur additional expenses such as making charges or concerns regarding purity. Furthermore, these bonds are securely held either in the books of the Reserve Bank of India (RBI) or in dematerialized (demat) form, mitigating risks associated with the loss or damage of physical certificates.

What is the rate of interest?

The interest rate on the first investment in the Bonds is 2.50 percent (fixed rate). Twice a year, interest credits are credited to the investor's bank account, and the last interest payment is due at maturity together with the principal.