Can be purchased from Commercial Banks, Post Offices, BSE and NSE Stock Holding Corporations
The ninth series of Government Sovereign Gold Bond (SGB) 2020-21 scheme has been opened for purchase from today i.e. 28th December. The series of Sovereign Gold Bond Scheme is closing for subscription on January 1, 2021. The Reserve Bank of India (RBI) raises money for the government through these bonds.
What is the value of the bond?
This information was given by the Reserve Bank last week. The government will give a discount of Rs 50 per gram on its nominal value to investors who buy sovereign gold bonds online. Thus, investors will get this gold bond at Rs 4,950 per gram.
On what basis was the price determined?
The nominal value of the bond is determined by the average closing price of 999 purity gold in the last three trading days of the subscription week, i.e. from December 22 to 24, the RBI said in its notification. The simple average closing price of gold belongs to India Bullion and Jewelers Association Limited (IBJA).
Who will get Rs 50 discount?
The RBI also said in the notification that the government has decided to give a discount of Rs 50 on the nominal value of the bonds in consultation with it. This discount will be available to investors who apply online for a subscription and pay in digital mode.
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Where can I buy gold bonds?
Bonds with SGB scheme can be purchased from commercial banks, post offices, stock exchanges - BSE and NSE and stock holding corporations. It can be purchased by Indian citizens, undivided Hindu families (HUF), trusts, universities and charitable institutions. In this scheme a bond equal to the price of at least one gram of gold can be purchased.
How many bonds can be bought?
Individuals and HUFs can buy up to four kg of gold in a financial year, while the maximum limit for trusts and other entities is set at 20 kg. The bond will mature in 8 years. But after five years it can be separated. It can be sold on the stock exchange at any time before the five-year lock-in.
What is the advantage of Sovereign Gold Bond?
This bond can be used as security for taking a loan. In this you will get the benefit of the increase in the price of gold over time. It will also earn 2.5% interest per annum, which will be credited to the bank account every six months. Interest earned on bonds will be taxable. But the capital gain from its sale will not be taxed.
Why did the government start this scheme?
The government launched the SGB scheme in November 2015 with the aim of reducing the demand for buying gold in physical form in the country. The government's aim in launching the scheme is to invest in financial securities and contribute to economic productive activities instead of spending on gold purchases.
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