Sovereign Gold Bond 2023-24 Series 3 Scheme Opens Today, Dec 18; Check Issue Price, Discount, Interest Rate

Sovereign Gold Bond (SGB) Scheme December Series III for the fiscal year 2023-2024 has opened for subscription today (December 18) to December 22. The subscription window for the gold bond scheme will be open till Friday, December 22.

The time is ripe for investors who want to invest in the precious metal gold as the subscription for the Sovereign Gold Bond (SGB) Scheme starts at a time when gold prices have touched the sky, up 10% in 2023, despite the Fed's pause on interest rate hike in the last meeting. The issue price of the current tranche of the gold bonds scheme has been fixed at Rs 6,199 per unit.

For those investors who apply online and make the payment through digital mode, a discount of Rs 50 per gram from the issue price has been allowed. Thus, for such investors, the issue price of the gold bonds will be Rs 6,149 per unit (Rs 6,199 - Rs 50), which is equivalent to one gram of gold.

The Government of India, in consultation with the RBI, has decided to allow 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. Hence, for such investors, the issue price of the gold bonds will be Rs 6,149 per unit, which is equivalent to one gram of gold.SGBs are government securities denominated in grams of gold. They are substitutes for holding physical gold.

Investors have to pay the issue price in cash and the bonds will be redeemed in cash on maturity. The Bond is issued by RBI on behalf of the Government of India. In the SGB scheme, the Reserve Bank of India (RBI) issues bonds linked with the market value of gold on behalf of the Government of India. SGBs are listed on stock exchanges, providing liquidity to investors who want to sell before maturity.

SGB interest income

Investment in SGBs provides investors with an additional source of income in the form of fixed interest, which is paid semi-annually. The interest rate is fixed at the time of issuance.

Sovereign Gold Bond issue price

The issue price of the current tranche of the gold bonds scheme has been fixed at Rs 6,199 per unit.

Sovereign Gold Bonds: Discount

A discount of Rs 50 per gram from the issue price is available for investors who apply online and the payment is made through digital mode.

Who is eligible to invest in the SGBs?

Persons resident in India as defined under the 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.

SGB lock-in period

The SGBs are issued with a maturity period of eight years, with a choice to exit from the completion of five years on interest payment dates.

Can you encash the bond anytime? Is premature redemption allowed?

Though the tenor of the bond is 8 years, early encashment/redemption of the bond is allowed after the fifth year from the date of issue on coupon payment dates. The bond will be tradable on Exchanges if held in demat form. It can also be transferred to any other eligible investor.

SGB 2017-18 Series XII - Issue date December 18, 2017) on Sovereign Gold Bond (SGB) Scheme, premature redemption of Gold Bond may be permitted after the fifth year from the date of issue of such Gold Bond on the date on which interest is payable. Accordingly, the next due date of premature redemption of the above tranche shall be December 18, 2023.

The redemption price of SGB shall be based on the simple average of closing gold price of 999 purity of the previous three business days from the date of redemption as published by the India Bullion and Jewellers Association Ltd (IBJA). Accordingly, the redemption price for premature redemption due on December 18, 2023, shall be Rs 6199 per unit of SGB based on the simple average of closing gold price for three business days, i.e., December 13-15, 2023.

What is the procedures for redemption of SGB?

• The investor will be advised one month before maturity regarding the ensuing maturity of the bond.
• On the date of maturity, the maturity proceeds will be credited to the bank account as per the details on record.
• In case there are changes in any details, such as account number, email ids, then the investor must intimate the bank/SHCIL/PO promptly.

Sovereign Gold Bond Scheme 2023-24 Series IV date

The Series IV of sovereign gold bonds is expected to hit the market from February 12 to 16, 2024.