What is RBI Sovereign Gold Bond (SGB), Benefits Of SGB: Latest SGB Tranche Opens In August 2022

Sovereign Gold Bond (SGB) is government security, denominated in gold, and considered a substitute for physical gold. The SGBs are issued by the Reserve Bank of India (RBI) on behalf of the union government. So, these investments are known as one of the safest income options from gold. Check the unique benefits, eligibility, and the latest tranche of RBI SGB, here.

What are the unique benefits of SGB?

The SGB offers a superior alternative to holding gold in physical form, so the risks and costs of storage can be avoided here. 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 the risk of loss of scrip etc. The profit or gain from SGBs is determined by the price rise or fall of gold in the domestic markets. However, an investor will not lose the units of gold that he/she has paid for.

Investors are assured of the market value of gold at the time of maturity and periodical interest. SGBs will offer an interest rate of 2.50% (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.

The tenor of the bond is 8 years, but early encashment/redemption of the bond is allowed after the 5th year from the date of issue. The bond will be tradable on Exchanges if held in Demat form, and one can transfer it to any other eligible investor.

Know How To Open Demat Account Here, (https://www.goodreturns.in/classroom/how-to-open-a-demat-account-to-start-trading-in-stock-markets-benefits-of-demat-account-1258625.html)

From Where Can You Buy SGBs?

The application form for SGB will be provided by the issuing banks/SHCIL offices/designated Post Offices/agents. It can also be downloaded from the RBI's website. Banks may also provide online application facilities. The payments can be made through cash (for up to Rs. 20000) /cheques/demand draft/electronic fund transfer. The applications should be accompanied by the 'PAN Number' issued by the Income Tax Department. An investor can have only one unique investor Id linked to any of the prescribed identification documents. The unique investor ID is to be used for all subsequent investments in the scheme. For holding securities in dematerialized form, quoting PAN in the application form is mandatory.

Latest Tranche of SGB: August 2022

According to the Ministry of Finance, "Sovereign Gold Bonds 2022-23 (Series II) will be opened for subscription during the period August 22-26, 2022 with settlement date August 30, 2022. The issue price of the Bond during the subscription period shall be Rs. 5,197 per gram." Additionally, the investors will get a discount of Rs. 50 per gram from the issue price to those investors who apply online and the payment is made through digital mode. For such investors the issue price of Gold Bond will be Rs. 5,147 per gram.

To invest in it, for having long-term gain, get the official SGB application form here:(https://rbidocs.rbi.org.in/rdocs/content/pdfs/INS181213AF.pdf)

Eligibility criteria

According to RBI, persons 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. In SGBs, joint holdings are also allowed. However, the application on behalf of the minor has to be made by his/her guardian.