Second tranche of sovereign gold bond issue opens for subscription from today. Check details here

The second tranche of the sovereign gold bond scheme 2021-22 opens for subscription on Monday, May 24, 2021. The issue will be open for investors between May 24 and May 28. The date of issuance for the second tranche is set as June 1.

In a statement last week, the Ministry of Finance, in consultation with the central bank, announced the issue price of gold bonds which will be available in the second tranche of the scheme.

According to the Reserve Bank of India (RBI), an issue price of ₹4,842 per unit, equivalent to the value of one gram of gold, is applicable for the second installment of the gold bond scheme 2021-22. Investors who apply online and make the payment online will get a discount of ₹50 per gram. Therefore, for such investors the issue price of Gold Bond will be ₹4,792 per gram of gold.

The issue is priced slightly higher from the first tranche which was at ₹4,777 per gram of gold. The Series-I or first tranche of gold bonds of this fiscal had opened for subscription between May 17 and May 21.

The Ministry of Finance had said that the central government in consultation with Reserve Bank of India has decided to issue Sovereign Gold Bonds. The Sovereign Gold Bonds will be issued in six tranches from May 2021 to September 2021.

The bonds will be sold through banks (except Small Finance Banks and Payment Banks), Stock Holding Corporation of India Limited (SHCIL), designated post offices, and recognised stock exchanges viz., National Stock Exchange of India Limited and Bombay Stock Exchange Limited.

The date of subscription for the third tranche is (May 31-June 4); for the fourth tranche (July 12-July 16); for the fifth tranche ( August 9-August 13), and for the sixth tranche ( August 30-September 3).

Sovereign gold bonds (SGBs) are government securities denominated in grams of gold. They are substitutes for holding physical gold. The Bond is issued by Reserve Bank on behalf of the government of India. The scheme was launched in November 2015 to reduce the demand for physical gold and shift a part of the domestic savings -- used for the purchase of gold -- into financial savings.

Experts say that sovereign gold bond is an effective way to invest in non-physical gold, if a buyer holds on till maturity. Gold funds or gold ETFs are typically seen as more liquid options than sovereign gold bonds. Gold bonds also offer an annual interest rate of 2.50% to investors.