Sovereign Gold Bond Scheme 2023-24, Returns, Lock-in Period and Benefits.

Sovereign Gold Bond Scheme 2023-24, Returns, Lock-in Period and Benefits

Are you against the idea of buying gold as an investment? If so, then Sovereign Gold Bond 2023 will make you think otherwise because this new scheme launched by the Reserve Bank of India aims at making the yellow metal as a means of investing money.

PrimeNewsly brings to you a comprehensive article on the Sovereign Gold Bond Scheme 2023-24. Keep on reading to know the price, benefits and returns of Sovereign Gold Bond 2023.

What is the Sovereign Gold Bond Scheme 2023-24?

The Sovereign Gold Bond Scheme allows investors to hold gold in the form of Government Securities instead of keeping it in physical form. Issued by RBI on behalf of the Government, the investor has to pay the issue price for investing in Sovereign Gold Bonds and the bonds are redeemed in cash upon maturity.

What is Sovereign Gold Bond price?

Sovereign Gold Bond Scheme was introduced in the Union Budget of 2015-16. However, the latest tranche of Sovereign Gold Bond Scheme 2023-24 Series-II opened for subscription from 11th September’23 and shall close on 15th September ’23. The investors feel that the Sovereign Gold Bond Scheme is a fantastic way of investing in gold because the investor receives units which are equivalent to the market price of gold.

The Sovereign Gold Bond price today for 1 gram of gold is INR 5923/.

However, there is a discount of INR 50 per gram if the investor makes payment through digital channels. Thus, the price becomes INR 5873/ for such investors.

What are Sovereign Gold Bond Returns?

Gold has always provided a hedge against volatility and inflation. Keeping that in mind, gold bonds gave a return of 13-15% last year. And with the festival season around the corner in India, the Sovereign Gold Bond returns are expected to be higher than those of other securities.

What is the rate of interest on Sovereign Gold Bonds?

Sovereign Gold Bonds bear an interest of 2.5% per annum on the initial investment. This interest is credited semi-annually to the account of the investor and instalment of interest is paid along with the maturity amount.

Is there any lock-in period for SGBs?

Sovereign Gold Bonds Scheme has a lock-in period of 8 years. However, premature withdrawals are possible after the first 5 years.

Sovereign Gold Bond Calculation

Suppose Mr. A buys one unit of SGB for INR 6000. He will get an interest of INR 150 per annum for 8 years.

6000*2.5% (interest rate) = INR 150 (INR 75 every six months)

INR 150*8= INR 1200.

Is there any minimum and maximum limit on investment in the Sovereign Gold Bond Scheme?

The minimum amount to be invested in Sovereign Gold Bonds Scheme is 1gm.

Maximum amount is:

• Individuals: 4kg
• Hindu Undivided Family: 4kgs
• Trusts and other entities notified by the government: 20 kgs

Who can invest in the Sovereign Gold Bond Scheme 2023-24?

• Persons residing in India according to the definition of Foreign Exchange Management Act 1999 can invest in the Sovereign Gold Bond Scheme. This includes individuals, trusts, HUFs, charitable institutions and universities.
• Individuals whose residential status has changed from resident to non-resident can continue to hold the securities until maturity.

What are Sovereign Gold Bond benefits?

Sovereign Gold Bonds 2023-24 issued by the RBI are directly linked to the market price of the gold and are a fantastic substitute for gold in physical form. The benefits of Sovereign Gold Bonds are:

• Guaranteed by the Government of India
• Investors receive the current market price of gold at the time of redemption.
• The cost of storage and risk is eliminated
• Investors receive periodical interest rates
• There are no making charges and GST
• Chances of loss of scrip are prevented because bonds are held in the books of RBI or in demat accounts.
• Can be used as collateral if you want loan
• No capital gain tax on redemption

How to buy Sovereign Gold Bonds online?

Following are the steps for buying Sovereign Gold Bonds SBI:

• Login to your SBI net banking by punching all the essential credentials
• Click on “e-service”
• Select “Sovereign Gold Bond Scheme”
• If you are a first-time user, then click on “Register” followed by Terms and Conditions and then hit the “Proceed” tab.
• Punch the details which are left blank like subscription quantity, nomination etc.
• Select NSDL or CDSL (your depository participant where you have the Demat account)
• Enter DP ID, Client ID and click Submit
• Cross-check the details and click Submit.

Sovereign Gold Bond Scheme 2023-24

Read here: https://t.co/xByZSQKk3N@FinMinIndia

— PIB India (@PIB_India) June 15, 2023

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Frequently Asked Questions

Is the interest on Sovereign Gold Bonds taxable?

Yes, the interest earned is taxable under the Income Tax laws.

From where can I buy Sovereign Gold Bonds upcoming issues?

• Sovereign Gold Bonds are sold at the offices or branches of:
• Nationalized Banks
• Scheduled Private Banks
• Scheduled Foreign Banks
• Stock Holding Corporation of India
• Designated Post Offices
• Authorized Stock Exchanges

Which bank is the best for Sovereign Gold Bond?

The top lender of Sovereign Gold Bonds in India is the State Bank of India.

Is there any risk in investing in SGB?

There is always a risk of capital loss if the market price of gold declines.

What is the price at which SGBs are sold?

Simple average of the closing price for the last 3 working days preceding the subscription period of 999 purity gold is the price at which SGBs are sold. This figure is published by the Indian Bullion and Jewellers Association Limited.

Can Sovereign Gold Bonds be brought on Zerodha?

• Login to kite.zerodha.com
• Click on Bids
• Click on Government Securities
• Click on Place Bid
• Enter the amount
• Click on Place Bid

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Conclusion

Sovereign Gold Bonds are a better investment proposition than gold ETFs or physical gold. Try holding the Sovereign God Bonds until maturity to save the capital gains tax. Apply online to avail an additional discount of INR 50 and let this be a new way of investing in gold.

Stay tuned for more updates!