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Closed
₹6263.00 per gram
- 16th Feb 2024 | 5 PM
- 2.5% of the Issue price
- 12th Feb 2024 | 10 AM
- 16th Feb 2024 | 5 PM
Upcoming Issue Date
Assured interest income of 2.5% p.a, paid every 6 months
Low risk since backed by the Govt. of India
Tax – free maturity with zero capital gains tax on maturity
Zero storage, GST or making charges as they are held digitally in demat accounts
Low minimum investment since minimum required is just 1 gram of gold
Asset appreciation on maturity if the price of gold has gone up as the units are redeemed at the prevailing gold price
Eligible to be used as collateral for Bank loans & F&O Margin.
SGB prices are linked to the price of 999 purity (24k) gold published by the India Bullion and Jewellers Association (IBJA).
SGBs are government - backed bonds with a fixed interest rate offered by the RBI denominated in grams of gold. They serve as a convenient substitute for physical gold investments.
Tenure of the bond is 8 years with an exit option to redeem after 5 years
Interest payouts of 2.5% p.a, paid semi annually
Tradable on stock exchanges once issued
Quantity of subscription is a minimum of 1gm and max investment is limited as per investor category
Retail and HUF investors can buy upto 4 kgs worth of SGBs every financial year. The limit for trusts and institutions is 20 kgs
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GST
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Costs
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Liquidity
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Extra Returns
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Income Tax
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N/A
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0.8%
Expense Ratio -
High
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No
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Slab Rate, Indexation
not available
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3%
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3%
Spread Cost, Insurance -
High
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No
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Capital gains,
Indexation Available
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3%
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10-20%
Making Charges -
Low
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No
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Capital gains,
Indexation Available
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N/A
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No Costs
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Very Low
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Yes, 2.5%
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Exempt if held till
maturity
FAQs on Sovereign Gold Bonds
FAQs on
Sovereign Gold
Bonds
When considering SGBs for investment, a critical choice arises to opt for newly issued SGBs or those already in the secondary market. Always compare prices, focusing on similar maturity periods. Existing SGBs might be trading at a discount.
In the secondary market, prioritize liquidity if you don’t plan to hold bonds until maturity; higher liquidity facilitates selling. Conversely, if you intend to hold until maturity, liquidity matters less.
No. However, if an individual resident investor becomes a NRI after purchasing SGBs, then he / she may continue to hold the SGBs till early redemption/maturity.
SGBs are government -backed securities with a fixed interest rate offered by the RBI denominated in grams of gold. It acts as a substitute for investment in physical gold such as gold bars and coins.
By opting for SGBs, you can enjoy the same benefits as owning physical gold, without the inconvenience of handling the physical gold directly. It eliminates the risks of theft and costs associated with physical gold such as storage, making charges and GST. This is because it can be stored electronically in your demat account.
By investing in them you can benefit from gold price appreciation, get 2.5% p.a guaranteed interest and enjoy tax benefits.
The first tranche of SGBs was introduced in November 2015 by the RBI. It was launched and is backed by the Govt of India with the aim to turn the country’s substantial stock of privately owned gold into a financial asset and thereby reduce India’s gold imports.
As per guidelines, investors can apply for the gold bonds through the SEBI- authorised trading members. PL is one of them.
You can invest in SGBs with PL by writing to mfss@plindia.com
And to know more about SGBs, you can arrange a call with our investment expert here.
