Investors have to pay the issue price in cash and the bonds will be redeemed in cash on maturity. The SGBs are issued by the RBI on behalf of the government.
Sovereign Gold Bond: The second tranche of the Sovereign Gold Bonds (SGB 2023-24 Series II) is all set to be launched for public subscription on September 11. These gold bonds, which will be issued by the RBI on behalf of the Central government, will remain open for subscription till Friday (September 15). The investors must note that the issue price of these gold bonds is Rs 5,923 per gram. However, a discount of Rs 50 per gram will be available on online payment for the investors.
It should be noted that the sovereign gold bonds are Central government securities denominated in grams of gold and these bonds substitute for holding physical gold.
Investors to Pay Issue Price in Cash
Investors have to pay the issue price in cash and the bonds will be redeemed in cash on maturity. The SGBs are issued by the RBI on behalf of the government.
The Reserve Bank of India (RBI) has announced a new tranche of the Sovereign Gold Bond (SGB) scheme and declared that the price of the gold bonds has been set at Rs 5,293 per gram.
“The nominal value of the bond based on the simple average of closing price for gold of 999 purity of the last three working days of the week preceding the subscription period, i.e. September 6-8, works out to Rs 5,923 per gram of gold,” RBI said.
Sovereign Gold Bonds: Check Discount
The ministry of finance in a statement said the Centre in consultation with the Reserve Bank of India has decided to allow a discount of Rs 50 per gram from the issue price to those investors who apply online and the payment is made through digital mode.
Sovereign Gold Bonds: Check Key Features?
Eligibility: Only residents of India, Hindu Undivided Family (HUF), trusts, universities and charitable institutions can buy sovereign gold bonds.
Denominations: The gold bonds are denominated in multiples of gram(s) of gold with a basic unit of one gram.
Tenure: As per the guidelines there is a holding period of eight years of SGBs with an option of premature redemption after 5th year to be exercised on the date on which interest is payable.
Interest Rate: The investors who are investing in gold bond will be compensated at a fixed rate of 2.50 per cent per annum payable semi-annually on the nominal value.