New Delhi : The most recent tranche of Sovereign Gold Bond Plan 2022-23 became open was membership on Monday, December 19 and will stay open for purchasing till Friday, December 23. These Gold Bonds can only be purchased by Indian residents, Hindu Undivided Families (HUFs), trusts, universities, and charitable organizations. They are issued by the Reserve Bank of India on behalf of the Indian government.
The Sovereign Gold Bond Scheme 2022-23 (Series III) issue price has been set at Rs 5,409 per gram, and it will be available for purchase for five days.
How does a sovereign gold bond work?
SGBs are gold-gram-denominated government securities. They take the place of having actual gold. The bonds will be redeemed in cash at maturity, and investors will be required to pay the issue price in cash. The Reserve Bank issues the Bond on behalf of the Indian Government.
The initial investment in Sovereign Gold Bonds is credited semiannually to the investor’s bank account at a rate of 2.50 percent annually. The principal and the final interest will be due at maturity.
SGB price
Although the central bank has set the bond’s issue price at Rs 5,409 per gram, investors can purchase it at a discount. SGB investors who apply online and pay electronically can get a discount on the bond worth Rs 50 per gram.
For instance, if an investor wishes to purchase one gram of gold through SGB, they can pay digitally for just Rs 5,359 instead of Rs 5,409. The central government in meeting with RBI has chosen to permit a markdown of Rs 50 for every gram not exactly the ostensible worth to those financial backers applying online and the installment against the application is made through computerized mode.
SGB vs physical gold
Having physical gold instead of SGB is one of the most popular ways for Indian households to invest in gold, but it comes with its own risks. However, because the investor receives the current market price at the time of redemption or premature redemption, SGBs safeguard the amount of gold paid for.
A better alternative to holding gold in physical form is the SGB. Storage is no longer risky or expensive. The gold’s market value at maturity and periodic interest are guaranteed to investors.
In addition, unlike gold jewelry, Sovereign Gold Bonds do not have to worry about issues like making charges or purity. The risk of losing scrip and other assets is eliminated because the bonds are held in demat or in the RBI’s books.
RBI Sovereign Gold Bonds
The RBI Sovereign Gold Bonds are issued in multiples of one gram of gold. There will be a one-gram minimum investment in the SGB, with a maximum subscription limit of four kilograms for individuals, four kilograms for Hindu Undivided Family (HUF), and twenty kilograms for trusts and similar organizations notified by the government from time to time during the fiscal year (April through March).
