New Delhi: Investors looking to capitalize on the benefits of Sovereign Gold Bonds (SGBs) will have a chance to subscribe to the latest tranche, Series IV of 2023-24, starting February 12. The subscription window will remain open for five days, concluding on February 16, with the issuance scheduled for February 21, 2024.
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Investment Opportunity
Sovereign Gold Bonds, introduced by the Indian Government in 2015, offer investors a unique way to invest in gold.
Recognized as Government of India Stock under the Government Securities Act, 2006, these bonds provide a favorable annual interest rate of 2.5 percent, credited semi-annually to investors’ accounts, with the final interest payment upon maturity.
Investment Details And Advantages
SGBs are denominated in grams of gold, with a minimum investment requirement of one gram and a maximum subscription limit of 4 kg. Investors have the option for premature redemption after the fifth year, coinciding with the date of interest payment.
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Importantly, upon maturity, these bonds incur no tax on redemption, making them an attractive option for long-term investors.
Valuation
Interested investors can purchase SGBs through various channels including scheduled commercial banks, designated post offices, and stock exchanges.
The valuation of SGBs is determined by the average closing price of 999 purity gold over the preceding three working days before the subscription period. Online subscriptions with digital payments also enjoy a discount of Rs 50 per gram.
Returns
Past performance of SGBs indicates promising returns, with the first series issued in 2015 maturing at the end of 2023, yielding annual returns of 12.9 percent.
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In comparison, the yellow metal averaged 11.2 percent returns over the last 20 years. SGBs issued on February 8, 2016 (SGB 2016-I) are set to mature on February 8, 2024.
