The Sovereign Gold Bond Scheme 2023-24 – Series IV will open for subscription from February 12-16, 2024, with an issue price of Rs 6,263 per gram of gold, the Reserve Bank announced on Friday.
Investors who apply and make payment for the bond online through digital mode will receive a discount of Rs 50 per gram, bringing the issue price for them to Rs 6,213 per gram.
The price of SGB is determined in Indian rupees based on the average closing price of gold of 999 purity, published by the India Bullion and Jewellers Association Limited (IBJA) for the last three working days of the preceding week before the subscription period.
The scheme offers a fixed rate of 2.50% interest per annum payable semi-annually on the nominal value, with a tenor of eight years and an option for premature redemption after the fifth year.
The maximum limit of subscription is 4 kg for individuals, 4 kg for HUF, and 20 kg for trusts and similar entities per fiscal year.
The SGBs will be sold through various avenues including banks, stock corporations, post offices, and stock exchanges, and can be used as collateral for loans. KYC norms for the purchase of physical gold will apply to the purchase of SGBs as well.
The Sovereign Gold Bond Scheme was introduced in 2015 with the aim of reducing the demand for physical gold and channeling domestic savings into financial instruments.
Insight: The Sovereign Gold Bond Scheme provides individuals and entities with an opportunity to invest in gold without the need for physical possession. This can promote financial savings and reduce the dependence on physical gold, thus helping to stabilize the market for the precious metal. For individual investors, understanding the intricacies of the scheme, including interest rates and subscription limits, is essential in making informed investment decisions.
