Latest Sovereign Gold Bond – SGB, Thing To Know About!
The most recent tranche of the Sovereign Gold Bond (SGB) program goes on sale today, June 19, and will last for five days, through June 23, 2023. Government securities called SGBs are valued in grams of gold. On behalf of the government, the Reserve Bank of India issues the Bond.
The issuing banks, designated Post Offices, and agents will provide you with an application form if you want to invest in SGB. The RBI’s website also offers a download option for it. Additionally, banks may provide online application services.
SGB 2023-24 Series I’s nominal value is $5,926 per gram of gold.
The bond’s nominal value is determined by taking the simple average of the closing prices for 999-purity gold on the final three working days of the week before the subscription period, i.e. June 14, June 15, and June 16, 2023, as reported by the India Bullion and Jewellers Association Ltd (IBJA).
The Reserve Bank has agreed to give investors a discount of 50/- per gram if they apply online and pay for the application using digital mode. When they buy a Gold Bond, they will pay Rs—5,876 for each gram of gold.
The redemption price will be in Indian Rupees and will be determined by taking the three-day rolling simple average of the closing price of 999-purity gold.
The investors will get a fixed return of 2.50 percent per year on the face value, which will be paid out every six months.
Bonds may be used as security for loans. The loan-to-value (LTV) ratio must be set at the minimum level for gold loans that the Reserve Bank may occasionally require.
The bond will have an 8-year tenor, and its exit option will become exercisable on interest payment dates in the fifth year.
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For each fiscal year, which runs from April to March, the most that can be subscribed is 4 KG for an individual, 4 KG for a HUF, and 20 KG for a trust or another similar organization.
The annual cap will cover secondary market purchases and bonds acquired in various tranches at the government’s initial issuance.