Sovereign Gold Bonds 2023-24 (Series I) Open For Subscription: Should You Invest In It?

The subscription period for Sovereign Gold Bonds 2023-24 (Series I) will be open from June 19 to June 23, 2023. The settlement date for these bonds is scheduled for June 27, 2023. As per the RBI's Press Release on June 16, 2023, the issue price during the subscription period is set at Rs 5,926 per gramme.

To encourage online and digital payments, the Government of India, in collaboration with the Reserve Bank of India, has announced a discount of Rs 50 per gramme off the issuance price. This means that investors who apply online and pay digitally will have the opportunity to purchase the Gold Bonds at an issue price of Rs 5,876 per gramme of gold.

The introduction of the Sovereign Gold Bond scheme to individual investors presents a unique and exclusive chance to partake in the gold market as an asset class. Through this controlled and reliable investment avenue, investors have the flexibility to enter the market by acquiring as little as one gramme of gold or as much as four kilos, catering to a wide range of investment preferences.

Why to invest?

1) SGBs are strong long-term investment bets, with capital appreciation anticipated if held for 8 years.

2) There is no risk of purity.

3) No chance of default because it is backed by a sovereign guarantee.

4) If held for eight years, there is no capital gains tax.

5) Because SGBs are exchanged on exchanges, they are highly liquid, unlike actual gold.

6) Investors earn 2.5 percent interest on their investment, which is paid semi-annually.

7) Can be used as collateral for a loan.

8) Retail investors receive a discount on SGBs if they apply online.

Where can investors buy SGB?

• Scheduled Commercial Banks (excluding Small Finance Banks, Payment Banks, and Regional Rural Banks), Stock Holding Corporation of India Limited (SHCIL), and Stock Exchange of India Limited (SEBI).
• CCIL (Clearing Corporation of India Limited),
• Specific post offices (as may be advised) and
• Stock exchanges that are either directly or indirectly recognised.

What is the tenor?

SGBs have an eight-year maturity, however there are exit options available in the fifth, sixth, and seventh years that are exercised on interest payment dates. In addition, the interest rate has been steady since its start at 2.5 percent.

Who can invest?

The Gold Bonds issued under this plan can be purchased by a Trust, Hindu Undivided Families (HUFs), Charitable Institutions, Universities, or an individual residing in India acting in his capacity as such individual, on behalf of a minor child, or together with any other individuals.