The subscription for the 2023-24 series of the Sovereign Gold Bond (SGB) scheme opened today, providing an opportunity for investors to buy gold in paper form while enjoying various benefits. The subscription period for the scheme will be open from March 6 to March 10, 2023.
The Sovereign Gold Bond Scheme
The SGB scheme was launched by the Government of India in November 2015 to provide a means for investors to invest in gold without the need for physical possession of the metal. The scheme is considered a safer option for investing in gold as it eliminates the concerns of security and purity that come with physical possession. The scheme also provides an opportunity to earn interest on the investment, which is not possible in physical gold.
The SGB scheme is issued by the Reserve Bank of India (RBI) on behalf of the Government of India. The bonds are denominated in grams of gold and are linked to the prevailing market price of gold. The minimum investment in the scheme is one gram of gold, and the maximum investment limit is four kilograms for individuals and Hindu Undivided Families (HUFs). The bonds are issued for a tenure of eight years, with an exit option available after the fifth year.
The SGB scheme offers a range of benefits to investors. Firstly, the bonds offer an annual interest rate of 2.50%, which is paid semi-annually on the investment amount. Secondly, the bonds can be used as collateral for loans, making them a useful option for those looking for a quick loan against their investments. Thirdly, the bonds are tradable on the stock exchange, providing investors with the flexibility to sell their investments at any time.
The 2023-24 series of the SGB scheme will be available for subscription in six tranches from March 6 to September 30, 2023. The issue price for the first tranche, which will be open for subscription from March 6 to March 10, has been fixed at Rs 4,583 per gram of gold. Investors who apply online and make payments through digital modes will receive a discount of Rs 50 per gram.
Investors can apply for the SGB scheme through various channels, including banks, designated post offices, and stock exchanges. The bonds will be issued in dematerialized form, and investors will receive a certificate of holding after the subscription. The bonds can be held in the Demat account of the investor, eliminating the need for physical storage.
The SGB scheme has gained popularity among investors over the years, with the government raising over Rs 25,000 crore through the scheme so far. The scheme has become an attractive option for long-term investment in gold, with the added benefits of earning interest and easy liquidity. The scheme has also helped the government reduce the import of physical gold, which has been a major cause of India’s current account deficit.
Commenting on the launch of the 2023-24 series of the SGB scheme, Mr. Rajnish Kumar, Chairman of the State Bank of India, said, “The Sovereign Gold Bond scheme has been a success story for the government, investors, and banks. The scheme provides an attractive investment option for those looking to invest in gold without the concerns of physical storage and security. We expect a good response from investors for the current series of the scheme, given the current market conditions and the benefits it offers.”
In conclusion, the 2023-24 series of the Sovereign Gold Bond scheme provides an excellent opportunity for investors to invest in gold in a paper form while enjoying various benefits. The scheme has been a success story for the government and investors, and we expect it to continue to attract investors in the future. Investors are advised to take advantage of the scheme’s benefits and invest.