Sovereign Gold Bond
Sovereign gold bonds are issued by the Reserve Bank of India (RBI) on behalf of the government. These are substitutes of holding physical gold. Investors have to pay the issue price in cash and the bonds will be redeemed in cash on maturity.
The second issue of gold bonds in year 2020-21 will open for subscription from tomorrow.
Period : 11 May’2020 – 15 May’2020
They offer an interest @ 2.50% per annum which is paid twice a year directly to investors linked bank account.
The issue price is kept at Rs. 4590 per gram with issue date of 19 May’2020. There is a discount of Rs. 50 per gram on making digital payment. There are no other charges or storage cost associated.
The nominal value of the bond is based on the simple average closing price (published by the India Bullion and Jewelers Association Ltd) for gold of 999 purity of the last 3 business days of the week preceding the subscription period.
In April on MCX gold future prices rises to a record Rs. 47,000 per 10 gram. In last one year prices prices of gold has surged around 40%.
The minimum investment in gold bonds is one gram and they have maturity period of eight years and maximum 4 KG for individuals and HUF per fiscal year.
Investors may exit after end of fifth year, option to be exercised on interest payment dates, bonds are also traded on stock exchanges.
Investors will get market price prevailing at the time of redemption.
Capital gains, if any, at maturity is tax-free. This is an exclusive benefit available on gold bonds. Physical gold or other forms of investments like gold ETF or gold mutual funds don’t qualify for this benefit.
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