Sovereign Gold Bond subscription to open on October 25

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Sovereign Gold Bond, RBI

The Government of India has decided to issue Sovereign Gold Bonds in consultation with the Reserve Bank of India. Sovereign Gold Bonds are going to be issued in four tranches during October 2021-March 2022.

The next tranche of Sovereign Gold Bonds 2021-22 will be open for subscription for five days from October 25, the finance ministry said in a statement on Thursday.

The subscription period for 2021-22 Series-VII will be October 25-October 29, and bonds will be issued on November 2, the finance ministry said.

The price of bonds will be fixed in Indian Rupees based on the simple average closing price of 999 purity gold, published by India Bullion and Jewelers Association Limited for the last three working days of the week preceding the subscription period. The issue price of the Gold Bond will be lower by Rs 50 per gram for those who subscribe online and pay through digital mode.

The tenure of the bond will be for a period of eight years with an exit option after the fifth year to be exercised on the next interest payment dates.

The minimum allowable investment will be 1 gram of gold, the ministry said, adding that the investors will be compensated at a fixed rate of 2.50 per cent per annum payable semi-annually on the nominal value.

What is Sovereign Gold Bond?

Sovereign Gold Bonds( SGBs) are government securities denominated in grams of gold with a minimum unit of 1 gram. They are the substitutes for holding the physical gold. Investors need to pay the issue price in cash, and bonds will be redeemed in cash at the time of maturity. The Reserve Bank of India issues the Bond on behalf of the Government of India.

Who can buy SGB?

Sovereign Gold Bond can be bought by Individuals, HUFs, Trusts, Charitable Institutions and Universities.

Minimum investment in the Bond will be one gram with a maximum limit of subscription of 4 Kg for individuals and HUF respectively, and 20 Kg for trusts and other entities

Where to buy SGB?

Bonds will be sold through branches or offices of Nationalised Banks, Scheduled Private Banks, Post Offices, Stock Holding Corporation of India Ltd, Scheduled Foreign Banks, and the authorized stock exchanges either directly or through their agents.