Sovereign Gold Bond Scheme​

Sovereign Gold Bond Scheme was launched by Government of India in November 2015. SGBs are government securities denominated in grams of gold (24k) . The Bond is issued by Reserve Bank of India on behalf of Government of India. Investors have to pay the issue price in cash and the bonds will be redeemed in cash on maturity.

Invest amount in 24k Gold with this bond and will get amount of 24k Gold market price on maturity (8 years lock).

Interest for Bond

The Bonds bear interest at the rate of 2.50 per cent (fixed rate) per annum on the amount of initial investment. Interest will be credited semi-annually to the bank account of the investor

Limitations

For Individual Investor

  1. Minimum – 1 Gram
  2. Maximum – 4 KG
  3. 8 years Lock-in period
  4. Exit option available only after 5 years

Benefits

  1. SGBs are alternative to holding physical gold
  2. Investors will get market price of gold at maturity time
  3. Gold loan available for this bond
  4. Free from making charges and purity of gold
  5. Risk and Costs of storage are eliminated and avoid theft

Eligiblity

  1. Individuals
  2. Minor – The application on behalf of the minor has to be made by his/her guardian parents
  3. HUFs
  4. Trusts
  5. Universities
  6. Charitable Institutions

Application Form

The application form will be provided by the issuing banks/SHCIL offices/designated Post Offices/agents

  1. Nationalised Banks
  2. Scheduled Private Banks
  3. Scheduled Post Offices
  4. Stock Holding Corporation of India Ltd.
  5. Stock exchanges

Apply Online

  1. Apply Online through the scheduled commercial banks. eg. SBI, ICICI, HDFC, AXIS and etc.
  2. Gold Bonds will be ₹ 50 per gram less

Holding Certificate

Certificate obtained directly from RBI ([email protected]) if email mentioned in application form
or Collect from office where you submit the form physically

Redemption/Maturity

Both interest and redemption proceeds will be credited to the bank account furnished by the customer at the time of buying the bond

Risks

There may be a risk of capital loss if the market price of gold declines. However, the investor does not lose in terms of the units of gold which he has paid for.

Example

Invested in 1 Gram – 5000 on December 2020
Interest 2.5% for 8 years

First Half yearly 1.25% on June 2021 for 5000
5000*1.25% = 62.5

Another 1.25% on December 2021 for 5000
5000*1.25% = 62.5

Maturity on December 2028
Gold Price is high eg. 5500 – Maturity amount is 5500
Gold Price is low eg 4500 – Maturity amount is 4500

Historical Data of Sovereign Gold Bond

Conclusion

Invest in Sovereign Gold Bond Scheme and diversify your Saving portfolio.

Useful links: Sovereign Gold Bond RBI Website

Happy Saving!

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