What is SGB?
Sovereign Gold Bonds are government securities. They are denominated in grams of gold. The Bond is issued by Reserve Bank on behalf of Government of India. Is SGB a good investment? How does it work? Benefits of SGB.
How does it work?
- SGBs are substitutes for holding physical gold.
- You have to pay the issue price in cash and the bonds will be redeemed in cash on maturity.
Is SGB a good investment?
Yes.
The quantity of gold for which the you pay is protected, you receive the ongoing market price at the time of redemption/ premature redemption. It offers a superior alternative to holding gold in physical form. The risks and costs of storage are eliminated.
You are assured of the market value of gold at the time of maturity and periodical interest. SGB is free from issues like making charges and purity in the case of gold in jewellery form. It is held in the books of the RBI or in demat form eliminating risk of loss of scrip etc.
Benefits of SGB
- No risks and no cost of storage as it offers ownership of gold without any physical possession.
- Tax benefits – The indexation benefits will be provided to long term capital gains arising to any person on transfer of bond. The capital gains tax arising on redemption of SGB to an individual has been exempted.
- Tradability – Bonds are tradable on stock exchanges within a fortnight of the issuance on a date as notified by the RBI.
- Transferability – Bonds are transferable by execution of an Instrument of transfer in accordance with the provisions of the Government Securities Act.
What is SGB scheme 2022?
Government of India, vide its Notification No F.No4.(6)-B (W&M)/2022 dated June 15, 2022, has announced Series I,II,lll and lV of Sovereign Gold Bond Scheme 2022-23. Under the Scheme, there will be a distinct series (Series I, ll, lII and IV) for every tranche. The terms and conditions of the issuance of the Bonds shall be as per the notification provided by Government.
The bonds shall be issued as per the details given below:
| Sr no. | Tranche | Subscription Period | Date of Issuance |
| 1 | 2022-23 Series I | June 20-24, 2022 | June 28, 2022 |
| 2 | 2022-23 Series Il | August 22-26, 2022 | August 30, 2022 |
| 3 | 2022-23 Series Ill | December 19-23, 2022 | December 27, 2022. |
| 4 | 2022-23 Series IV | March 6-10, 2023 | March 14, 2023. |
Upcoming SGB issues
| Sr no. | Tranche | Subscription Period | Date of Issuance |
| 1 | 2022-23 Series Ill | December 19-23, 2022 | December 27, 2022 |
| 2 | 2022-23 Series IV | March 6-10, 2023 | March 14, 2023. |
SGB interest rate
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 and the last interest will be payable on maturity along with the principal.
How to apply?
The application form is provided by the issuing banks/SHCIL offices/designated Post Offices/agents. It can also be downloaded from the RBI’s website. Banks may also provide online application facility.
link to download application form: https://rbidocs.rbi.org.in/rdocs/content/pdfs/INS181213AF.pdf
SGB price
A customer can apply online through the website of the listed scheduled commercial banks. The issue price of the Gold Bonds will be ₹ 50 per gram less than the nominal value to those investors applying online and the payment against the application is made through digital mode.
Read more:
https://govtschemesin.com/index.php/2022/11/03/digital-rupee/
https://govtschemesin.com/index.php/2022/10/28/samriddhi-2022-23/.
https://govtschemesin.com/index.php/2022/10/24/ncap/