SGBs are government-backed securities. The bonds are denominated in grams of gold (999 purity). The Reserve Bank of India issues these bonds on behalf of the government.
Sovereign Gold Bond Scheme 2023 Date, Price: The Sovereign Gold Bond (SGB) scheme’s new tranche will open for subscription for 5 days, starting on March 6, news agency IANS reported on Friday evening. The price for the Sovereign Gold Bond scheme 2022-23 (Series-IV) has been fixed at Rs 5,611 per gram, it said citing sources.
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What is Sovereign Gold Bond?
SGBs are government-backed securities. The bonds are denominated in grams of gold (999 purity). The Reserve Bank of India issues these bonds on behalf of the government.
SGB Discount
The government, 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.
For such investors the issue price of gold bond will be Rs 5,561 per gram of gold.
SGBs are substitutes for physical gold. The minimum investment in the bond is one unit (1 gram). The maximum limit is 4 kg for an individual. For trusts and similar entities that are notified by the government, the upper limit is 20 kg.
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Sovereign Gold Bond Interest Rate
The government pays 2.5 per cent interest yearly on the amount invested till maturity. The default maturity period of SGCs is 8 years. The government, however, allows investors to exit after 5 years subject to certain conditions.
The interest amount is credited semi-annually into the bank accounts of investors. The interest earned is taxable as per the provisions of the Income Tax Act, 1961.
