Gold prices frequently rise in tandem with rising inflation and a weakening dollar. As a result, when investors realize they are losing money, they may attempt to acquire gold as a hedging asset. Gold, unlike currencies, is unaffected by interest rate changes and cannot be created to manage supply and demand. Physical gold ownership comes with storage, insurance, and other high-cost fees, and gold mining firms can be a risky investment. As a result, it's no wonder that SGBs have proven to be a popular way to obtain exposure to gold without having to store it.
About Sovereign Gold Bond Scheme
Sovereign gold bonds are RBI-mandated certificates issued in exchange for grams of gold, allowing individuals to invest in gold without having to worry about keeping their physical assets safe. Because gold prices are less subject to market volatility, sovereign gold bonds are a safe investment option for people. The maximum amount of gold that can be purchased through gold bonds is 4 kg per investor every fiscal year. It is possible to nominate someone. Remember to amend the nominee information throughout the investing process, or you can do it afterward. Every year, the interest rate on gold bonds is 2.50 percent. Remember, this is in addition to the gold price increase. On the nominal value, interest is paid every six months or semi-annually. Gold bonds are issued for an eight-year period, with early withdrawal permitted beginning in the fifth year. Individuals can also sell their securities on the secondary market at the gold market rate.
Sovereign Gold Bond Scheme 2021-22 - Series III Details
The most recent scheme will be available for subscription from May 31, 2021, to June 4, 2021. Based on the simple average closing price published by the India Bullion and Jewellers Association Ltd (IBJA)] for gold of 999 purity on the last three working days of the week preceding the subscription period, i.e. May 26, May 27, and May 28, 2021, the nominal value of the bond is Rs 4,889/- per gram of gold.
In collaboration with the Reserve Bank of India, the Government of India has agreed to grant a discount of 50/- per gram less than the nominal value to those investors who apply online and pay for their application via the digital channel. The issue price of a Gold Bond for such investors will be Rs 4,839/- per gram of gold.
Sovereign Gold Bond Scheme Series III Scheme
Price: Rs 4,889/- per gram
Discounted Price: Rs 4,839/- per gram
Subscription Date: May 31, 2021, to June 4, 2021
Tenure: 8 Years
Redeem: After 5 Years
Should you consider investing in Sovereign Gold Bond Scheme 2021-22 - Series III?
In comparison to actual gold, gold bonds offer a more safe option and benefits to investors. Gold bonds safeguard the value of the precious metal for which they were purchased. Gold bonds can also assist you acquire a loan from a bank, another financial institution, or a non-banking financial firm (NBFC). Physical gold comes with a cost and a risk of storage. Physical gold has its own set of characteristics, such as the cost of creating jewellery and the purity of the metal. SGBs, on the other hand, does not entail any of the risks that come with owning actual gold. On the bonds, there are no heavy creating or designing expenses or TDS. Additionally, no one can steal or change ownership.