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Sovereign Gold Bond open for subscription; Benefits, how to invest and more

The Sovereign Gold Bond (SGB) scheme for 2023-24, designed to provide investors with a secure and flexible way to invest in gold, has opened its second tranche for subscription. With an extended tenure of eight years, SGBs offer an attractive fixed interest rate of 2.50 percent per annum

Sovereign Gold Bond open for subscription; Benefits, how to invest and more
First Published Sep 11, 2023, 10:54 AM IST

The opportunity for investors seeking a secure avenue for investment in gold has arrived, as the second tranche of the Sovereign Gold Bond (SGB) scheme for the fiscal year 2023-24 is now open for subscription, running until Friday, September 15. This government-backed scheme offers a limited-time window for investment. The issue price for this tranche has been firmly set at Rs 5,923 per gram of gold. However, tech-savvy investors opting for online subscriptions can enjoy a discount of Rs 50 per gram, making it an enticing proposition.

What are Sovereign Gold Bonds?

Sovereign Gold Bonds are denominated in grams of gold and provide an alternative to physical gold ownership. Launched in November 2015, the primary goal of this scheme is to reduce the demand for physical gold and encourage savings to flow into financial assets, thereby reinforcing India's financial infrastructure.

Why invest in Sovereign Gold Bonds? 

One of the notable features of the Sovereign Gold Bond Scheme for 2023-24 is its extended tenure, spanning eight years. Additionally, investors have the flexibility of premature redemption after the fifth year, aligning with the date of interest payment.

Investment limits are structured to cater to various investor profiles. The minimum investment starts at just one gram of gold, ensuring accessibility to a wide range of individuals. At the upper limit, individuals can subscribe to a maximum of 4 kg, while Hindu Undivided Families (HUFs) and trusts, among others, enjoy higher limits of 4 kg and 20 kg per fiscal year, respectively.

SGBs offer an attractive fixed interest rate of 2.50 per cent per annum, paid semi-annually on the nominal value. This characteristic appeals to both conservative and aggressive investors, according to experts.

How to purchase Sovereign Gold Bonds?

Acquiring these bonds is a straightforward process, especially when done online. Here are the steps to follow:

Step 1: Log in to your net banking account.

Step 2: Select 'e-Service' from the main menu and choose 'Sovereign Gold Bond.'

Step 3: First-time investors should register, review the Reserve Bank of India's terms and conditions, and proceed. Enter the necessary details for the SGB scheme and the depository participant from NSDL or CDSL, which hosts the demat account.

Step 4: Submit the registration form.

Step 5: After registration, click on the 'Purchase' option in the header tab.

Step 6: Input the subscription quantity and nominee details.

Step 7: Enter the one-time password (OTP) sent to your mobile phone to complete the process.

Furthermore, SGBs can be acquired from the secondary market even after the last subscription date, through primary issuance by stock exchanges or the Reserve Bank of India (RBI). These bonds provide a secure and flexible way to invest in gold while enjoying periodic interest payments

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