Things to know about gold bonds | Fusion - WeRIndia

Things to know about gold bonds

Things to know about gold bonds

Many Indians buy gold on the occasion of Akshaya Tritiya believing it would fetch them prosperity and wealth. It is the day which people consider auspicious for new ventures, investments and auspicious occasions like marriages. This year the festival falls on April 26.

Now the country is under lockdown and fighting against the coronavirus pandemic. Only essential services are open in the country. In this context, people who want to buy gold in physical form see it difficult.

For them, gold bonds are a good opportunity. The Series I of the Sovereign Gold Bond (SGB) Scheme 2020-21 had opened yesterday and would be closed on April 24. Those who subscribed for this scheme will be issued a certificate of gold bonds on April 28.

The issue price of the gold bonds has been fixed at ₹4,639 per gram of gold of 999 purity.

If you are interested to buy gold bonds, then here are certain things to know them:

  • The Reserve Bank of India (RBI) will issue sovereign gold bonds to subscribers on behalf of the government.
  • Bonds will be sold through banks, selected post offices, Stock Holding Corporation of India (SHCIL), and stock exchanges (NSE and BSE).
  • Those who apply online and make payments digitally will get a discount of ₹50 per gram.
  • The minimum allowed investment in these gold bonds is one gram of gold.
  • Subject to liquidity, these bonds will be tradeable on stock exchanges within a fortnight of the issuance on a date as notified by the RBI.
  • The issue price is fixed based on the latest closing price of gold published by the India Bullion and Jewellers Association Ltd.
  • The maturity period is eight years for the bonds. However, investors can exit after the fifth year.
  • These gold bonds offer annual interest of 2.50 per cent which will be added to the income of the subscriber and taxed accordingly.
  • However, the capital gains after maturity are tax-free. Other forms of gold investments like physical gold or gold mutual funds do not have this benefit.

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