Sovereign Gold Bonds Scheme (SGB) Introduced:
Sovereign Gold Bonds Scheme are popularly known as SGB scheme in
India. Sovereign Gold Bonds Scheme were introduced in November 2015 by the
Government of India under the Gold Monetization Scheme.
Prime Minister Narendra Modi launched four Gold related schemes
viz., Gold Monetization Scheme (GMS), Sovereign Gold Bond Scheme (SGBs), Gold
Coin Scheme and the Gold Bullion Scheme on Thursday 5th November 2020 to reduce
demand / hold of physical Gold and aim at productive use of 20,000 tons of
precious gold lying idle in Indian households and temples. Reserve Bank of
India in consultation with the Government of India will issue the bond as
substitutes for holding physical gold.
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| 10 Key Features of Sovereign Gold Bond Scheme (SGB) by RBI Subramoneyplanning.blogspot.com |
10 Key Features of Sovereign Gold Bond Scheme (SGB)
1) Eligibility Criteria for
Investment:
Sovereign Gold Bonds are restricted only to be sold to Resident of
India which includes individuals, HUFs, Trusts, Universities and Charitable
Institutions. Also, Resident Individuals can invest on behalf of minors.
2) Tenure:
The tenure of the bond is fixed at 8 years with premature exit
options exercised at the end of the 5th, 6th and 7th year.
3) Minimum Investment Limit:
Minimum Value of 1 gram of gold for all type of Investors and in
multiples of grams
4) Maximum Investment Limit:
Maximum Value of 4 Kilograms for Individual and HUFs, 20 Kgs for
Trust and all other similar entities per fiscal year (April-March)
5) Interest Rate:
Sovereign Gold Bond bear interest at 2.5% (fixed rate) per annum.
Interest will be credited semi-annually to investor's bank account and the last
interest shall be payable with principal amount on maturity.
6) Availability:
Bond is available both in Demat and Paper form
7) Issue Price:
Issue price of a Sovereign Gold Bond is fixed in INR on the basis
of simple average of closing price of 999 purity gold (24 carat) published by
the India Bullion and Jewellers Association Limited (IBJA) for the last 3
business days of the week preceding the subscription period.
8) Redemption Price:
On maturity of the Sovereign Gold Bond, bond shall be redeemed in
Indian Rupees on the basis of simple average of closing price of 999 purity
gold (24 carat) published by the India Bullion and Jewellers Association
Limited (IBJA) for the last 3 business days of the week preceding repayment
date.
9) Where it is sold:
The Gold Bonds can be purchased through banks, Stock Holding
Corporation of India Limited (SHCIL), selected post offices and trading through
NSE and BSE (National Stock Exchange of India and Bombay Stock Exchange of
India)
10) Finally, who can buy or
invest in Sovereign Gold Bond Scheme (SGBs)? Or SGB is suitable for whom?
The investors who are conservative in nature, low risk appetite persons, those who are fond of gold as a safe investment and those who want to protect against risk of theft or cost of storage in physical form can buy or invest in Sovereign Gold Bond Scheme (SGBs) as it has all the benefits of gold investment with more secure mode of investment backed by the Government of India with interest rate & no loss on making charges and probability of appreciation of gold price during redemption.
For more latest details about SGBs (Sovereign Gold Bond Scheme) press release from RBI Circulars, please have a look at https://rbi.org.in/Scripts/BS_SwarnaBharat.aspx
For most frequently asked questions (FAQs) regarding Sovereign Gold Bond Scheme (SGBs), please have a look at https://m.rbi.org.in/Scripts/FAQView.aspx?Id=109
