Sovereign Gold Bond scheme: Here’s how to buy cheaper gold ahead of Dhanteras

The latest Sovereign Gold Bond Scheme, which was launched in November 2015 to reduce the demand for physical gold and shift a part of the domestic savings into financial savings, will be opened for subscription from November 9 to 13, 2020.
Gold bars are displayed at the headquarters of Mitsubishi Materials Corporation in Tokyo in this file photo. The issue price for Sovereign Gold Bond Scheme 2020-21-Series VIII has been fixed at <span class='webrupee'>₹</span>5,177 per gram of gold, the central bank has said.(Reuters Photo)
Gold bars are displayed at the headquarters of Mitsubishi Materials Corporation in Tokyo in this file photo. The issue price for Sovereign Gold Bond Scheme 2020-21-Series VIII has been fixed at 5,177 per gram of gold, the central bank has said.(Reuters Photo)
Published on Nov 08, 2020 08:45 PM IST
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Hindustan Times, New Delhi | Byhindustantimes.com | Edited by Meenakshi Ray

The eighth tranche of Sovereign Gold Bond 2020-21, which is issued by the Reserve Bank India (RBI) on behalf of the government, will open for subscription on Monday ahead of Dhanteras and Diwali later in the week. The issue price for Sovereign Gold Bond Scheme 2020-21-Series VIII has been fixed at 5,177 per gram of gold, the central bank has said.

The latest Sovereign Gold Bond Scheme, which was launched in November 2015 to reduce the demand for physical gold and shift a part of the domestic savings into financial savings, will be opened for subscription from November 9 to 13, 2020. “The nominal value of the bond based on the simple average closing price [published by the India Bullion and Jewellers Association Ltd (IBJA)] for gold of 999 purity ... works out to 5,177 per gram of gold,” RBI has said.

Here’s how you can buy gold at a comparatively cheaper price through Sovereign Gold Bond Scheme 2020-21-Series VIII:

1. RBI will offer a discount of 50 per gram less than the nominal value to those investors applying online and the payment against the application is made through digital mode.

2. The central bank said that for such investors, the issue price of Sovereign Gold Bond will be 5,127 per gram of gold.

3. The issue price for the bonds (Series VII), which was open for subscription from October 12 to October 16, was 5,051 per gram of gold.

4. The bonds are denominated in multiples of gram(s) of gold with a basic unit of 1 gram and the tenor of the SGB will be eight years with exit option after the fifth year to be exercised on the interest payment dates.

5. Only resident individuals, Hindu Undivided Families (HUFs), trusts, universities and charitable institutions can buy the Sovereign Gold Bonds.

6. The minimum permissible investment is 1 gram of gold and the maximum limit of subscription is 4kg for individuals, 4kg for HUFs and 20kg for trusts and similar entities per fiscal or between April and March.

7. Investors can buy gold bonds from banks, except small finance banks and payment banks, Stock Holding Corporation of India (SHCIL), designated post offices, and recognised stock exchanges (NSE and BSE).

8. The Sovereign Gold Bonds are denominated in multiples of grams of gold with a basic unit of 1 gram.

9. The tenure of the gold bonds will be eight years with exit option after the fifth year to be exercised on the interest payment dates.

10. A total of 9,652.78 crore (30.98 tonnes) has been raised through the Sovereign Gold Bonds Scheme (37 tranches) since its inception in November 2015, RBI said in its Annual Report 2019-20. The central bank has issued 10 tranches of Sovereign Gold Bonds (SGBs) for 2,316.37 crore (6.13 tonnes) during 2019-20.

(With agency inputs)

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