Gold bonds have a maturity period of eight years with an exit option after fifth year
The redemption price is based on the then prevailing price of gold.
The eighth tranche of sovereign gold bonds of this fiscal opens for subscription today and will close on November 13. The issue price for Sovereign Gold Bond Scheme 2020-21-Series VIII has been fixed at ₹5,177 per gram of gold. Dhanteras and Diwali will be celebrated next week. The sovereign gold bond scheme was launched in November 2015 to reduce the demand for physical gold and shift a part of the domestic savings into financial savings.
1) A discount of ₹50 per gram will be available those investors applying online and the payment against the application is made through digital mode.
2) For such investors, the issue price of the gold bond will be ₹5,127 per gram of gold.
3) The nominal value of the bond has been fixed based on the simple average closing price [published by the India Bullion and Jewellers Association Ltd (IBJA)] for gold of 999 purity of the last three business days of the week preceding the subscription period, i.e. November 04 - 06, 2020, the RBI said.
4) The issue price for the previous tranche of gold bonds (Series VII), which was open for subscription from October 12 to October 16, was ₹5,051 per gram of gold.
5) Sovereign Gold Bond 2020-21 is issued by Reserve Bank India on behalf of the Government of India.
6) The bonds are denominated in multiples of gram(s) of gold with a basic unit of 1 gram and the minimum permissible investment is 1 gram.
7) Gold bonds offer an annual interest rate of 2.50% to investors.
8) 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 though they are listed on stock exchanges.
9) Gold bonds have a maturity period of eight years with an exit option after fifth year. The redemption price is based on the then prevailing price of gold.
10) Capital gains, if any, at maturity is tax-free. This is an exclusive benefit available on gold bonds. (With Agency Inputs)