The Buyt Desk
Get ready for Sovereign Gold Bond Scheme 2021-22’s IVth Series which opens for subscription from 12th July 2021. It will be open for subscription for five days i.e from 12th July to 16th July. The issue price will be Rs 4807 per gram of gold as announced by the Reserve Bank Of India. If you buy SGB online through the digital mode of payment you will earn a discount of Rs 50 on the price of the bond. The issue price post the discount will be Rs 4,757 per unit. The price of Series III which came on May 31st was Rs 4,889 per gram of gold. Of late there has been pressure on gold prices internationally and thus we see a decline in the price of the gold bond as well.
How many SGB tranches have been announced so far?
The government has already announced that there will be six tranches from May 2021 to September 2021. Out of the 6 Series, July will see the release of the 4th Series. The bonds are sold by approved commercial banks, Stock Holding Corporation of India Ltd (SHCIL), authorised post offices and stock exchanges like National Stock Exchange(NSE) and Bombay Stock Exchange(BSE).
Till the end of March 2021, a total of Rs 25,702 crore has been raised through the SGB Scheme since its inception. During 20-21, 12 tranches of SGB amounting to Rs 16,049 Crore were issued. This was around 32.35 tonnes of gold. The scheme was started in 2015 with the sole purpose that people could be encouraged to buy gold in the form of financial assets and not in physical form only. This is why to make it an attractive purchase RBI gives a discount on the price as compared to the market rate and also gives interest on gold purchased.
Price & Cost of Sovereign Gold Bond
The price of Sovereign Gold bond is arrived at by taking out an average of the current price of 999 purity gold. This price is given by Indian Bullion and Jewellers Association to RBI and then RBI takes out the average and announces the final price. The bonds are in multiple grams with one basic unit of 1 gram. The minimum amount that you can buy is 1 SGB which comprises 1 gram of gold. The maximum limit of SGB that one person can buy is 4 KG. Even Hindu Undivided Family can buy up to 4 KG but a trust can buy up to 20 KG worth SGB. The tenor of SGB is 8 years though investors have an exit option that they can exercise after the 5th year.
