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What is RBI Sovereign Gold Bond (SGB), Benefits Of SGB

Sovereign Gold Bond (SGB)
Written by Zimmy

What is RBI Sovereign Gold Bond (SGB), What Benefits Of SGB

Sovereign Gold Bond (SGB)

What are the benefits unique to SGB?

The SGB provides a better alternative to holding the physical gold thus the risks and expenses of storage can be reduced with this option. SGB is completely free of problems like charges for making and pureness in the case of jewelry-grade gold. SGBs are kept within the accounts of RBI as well as in Demat form, thereby removing the risk of losing the scrip, etc. The gain or loss from SGBs is determined by the value of gold in the local markets. But, investors are not liable to lose the gold units they have paid for.

Investors can be assured of the value that is market-based for gold at maturity and periodic interest. SGBs provide rates of 2.50 percent (fixed amount) per year for the amount of the initial investment. The interest will be credited bi-annually to the accounts of the investors, and the least amount of interest is due at the time of expiration, together alongside the principle.

The tenor of the bond is 8 years, but early encashment/redemption of the bond is allowed after the 5th year from the date of issue. The bond is tradable through Exchanges provided it is held in Demat form. One may transfer it to another investor eligible.

Where can you purchase SGBs?

Application forms for SGB are provided by the banks that issue SGB, the SHCIL offices, or designated Post Agents/Offices. You can also download it via this website. Banks might also offer online application options. The payment can be made in the cash (for up to 20000 rupees). 20000) or electronic fund transfer, cheques/demand draft/electronic funds transfer. Applications must be with the ‘PAN Number given by the Income Tax Department.

Investors can only have one unique ID for investors connected to any of the required identification documents. The investor ID unique to the individual will be used for future investments within the scheme. To hold securities in the dematerialized form providing PAN on the form of application required.

The most recent Tranche of SGB August 2022

In accordance with the Ministry of Finance, “Sovereign Gold Bonds 2022-23 (Series II) will be open for subscription from August 22-26 of 2022, with a closing date on August 30, 2022. The price for the issue for the Bond during the subscription period will be the amount of Rs. 5,197 per gram.” In addition, investors will be offered discounts of Rs. 50 per gram of the issue price for applicants who make their application online and pay completed via digital payment. For those investors, the price of a Gold Bond will be Rs. 5,147 per gram.

Eligibility requirements

According to RBI, the residents of India as defined by the Foreign Exchange Management Act, 1999 are eligible to make investments in SGB. Investors who are eligible include trusts, individuals, HUFs as well as universities and charitable institutions. Individual investors who change of residence state from resident to nonresident could remain in possession of an SGB until the time of early redemption or maturity. In SGBs, joint ownership is also permitted. However, the request on the minor’s behalf is to be signed by the person who is the guardian.

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