Fifth tranche of Gold bond scheme opens for subscription

Last Updated09/08/2021

The government had earlier announced that it will issue the sovereign gold bond in six tranches from May 2021 to September 2021.
The scheme will remain open till August 13 to give a chance to people to buy gold at a lower price.
The government, in consultation with the Reserve Bank of India (RBI), is also providing a discount of ₹50 per gram to those applying online.

Gold is an asset that holds emotional and social value in India.
It is the most coveted asset that is also considered an auspicious investment.
But holding physical gold comes with its own set of risks and costs.
Hence, the Government of India introduced Sovereign Gold Bonds (SGB) in November 2015.
SGBs are debt securities denominated in grams of gold and are issued by the RBI on behalf of the government.

SGB are government securities denominated in gold.
The bonds are issued by the RBI on the government’s behalf. Hence these gold bonds will be a good substitute for physical gold.
The purchase and redemption upon maturity both happen in terms of cash and not gold.
SGBs were introduced in November 2015 and enable one to own gold in certificate format.
SGBs are fully transparent, and also track the import-export value of the gold.
Since the government backs it, SGBs are considered as safe.
Gold bonds are assessed in multiples of grams of gold. One unit is equal to 1 gram.
The minimum investment in SGBs is one gram, and the maximum is 4 kg for individuals and Hindu Undivided Family (HUF).
However, for trusts and similar entities, 20kgs is the maximum investment.

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
The last interest will be payable on maturity along with the principal.
The tenure of these bonds is eight years, and the bonds mature after this period.
However, the investor can withdraw the bond after the 5th year.
Bonds are sold through offices or branches of Nationalised Banks, Scheduled Private Banks, Scheduled Foreign Banks, designated Post Offices, Stock Holding Corporation of India Ltd. (SHCIL) and the authorised stock exchanges either directly or through their agents.

All Indian residents are eligible to invest in a Sovereign Gold Bond Scheme.
HUFs, trusts, universities, and charitable institutions can also invest in SGBs.
Guardians can invest on behalf of minors.