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The fifth tranche of gold bonds of this fiscal opens today and the issue price has been fixed at ₹5,334 per gram. Those applying online and making payment online get a discount of ₹50 per gram. For such investors, the issue price of gold bond will be ₹5,284 per gram of gold. The Sovereign Gold Bond Scheme 2020-21-Series V remains open till August 7 (Friday). This offering comes at a time when gold price has surged about 37% this year and prices have inched closer to around ₹54,000 per 10 gram
Here are 10 things to know about latest gold bond scheme:
1) The issuance date of this latest tranche of gold bonds will be August 11, 2020
2) Sovereign gold bonds are issued by RBI on behalf of the Government of India. Basically, gold bonds are government securities denominated in grams of gold. They are substitutes for holding physical gold.
3) The bonds are denominated in multiples of gram(s) of gold with a basic unit of 1 gram.
4) The RBI had in April had announced the government will issue Sovereign Gold Bonds (SGBs) in six tranches beginning April 20 till September.
5) The September tranche of gold bonds (Sovereign Gold Bond Scheme 2020-21-Series VI) will open from August 31, 2020 till September 04, 2020.
6) The tenor of the gold bonds is eight years with exit option after fifth year.
7) Gold bonds are sold through banks, designated Post Offices, Stock Holding Corporation of India Ltd. (SHCIL) and the stock exchanges either directly or through their agents.
8) The redemption price is based on the then prevailing price of gold – simple average of closing price of gold of 999 purity of previous 3 business days from the date of repayment, published by the India Bullion and Jewelers Association Limited.
9) If the gold bond is held in demat form, it can be traded on exchanges, offering an exit route before five years.
10) Gold bonds offer an annual interest rate of 2.50% to investors. Capital gains, if any, at maturity is tax-free. This is an exclusive benefit available on gold bonds.
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