The Reserve Bank of India (RBI) opened subscriptions for the Series IV of its Sovereign Gold Bond Scheme 2022-23 on Monday and will be available till March 10. This would be the tranche for the fiscal year. SGBs, or Sovereign Gold Bonds, are issued on behalf of the Centre by the Reserve Bank of India (RBI) as an alternative to purchasing physical gold. These bonds are issued as Government of India Stock under the Government Securities Act, 2006.
The RBI has set the issue price at Rs. 5,611 per gram of gold, up from Rs. 5,409 per gram in December 2022. Notably, investors who apply for the bond online and make payments digitally will have a discount of Rs. 50 per gram.
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What is it to invest in SGBs-Interest: The interest rate on Sovereign Gold Bonds is 2.50% per year on the initial investment that investors make to purchase the bond.
-Security: Unlike physical gold, there is no need for storage when investing in SGBs, which makes them more secure.
-Collateral: SGBs can be used as collateral for loans. The loan-to-value (LTV) ratio is to be set equal to the ordinary gold loan mandated by the RBI from time to time.
-No GST and Making Charges: Unlike gold coins and bars, sovereign gold bonds are not subject to goods and services tax (GST). When purchasing digital gold, you must pay 3% GST, just as you would when purchasing physical gold. Furthermore, there are no making charges on SGBs.
Who can invest?-The Sovereign Gold Bond Scheme 2022-23 is open to all Indians.
-Minimum limit: In order to invest in the SGB scheme, investors must purchase at least one gram of gold.
-Maximum limit: The subscription limit is 4 kg for individuals and 4 kg for Hindu Undivided Families (HUF). This fiscal year, the maximum limit for trusts and similar entities is 20 kg. The government can change this limit at any time.
– Documents required: Voter ID, Aadhaar card/PAN, or TAN/Passport are required for the application of these bonds.
Maturity periodThe Sovereign Gold Bond has an 8-year lock-in period. The investors will receive a Certificate of Holding, and the bonds will be eligible for demat conversion.
In the fifth year, there is an exit option that can be used on interest payment days. To exit, investors can sell these bonds on the stock exchange. The redemption price will be determined by the then prevailing gold price.
How to obtain ?Sovereign Gold Bonds can be purchased from authorised post offices, Scheduled Commercial Banks, Stock Holding Corporation of India Limited (SHCIL), Clearing Corporation of India Limited (CCIL), and the stock exchanges NSE and BSE.
How to make payment?Investors who make their investment online can pay with UPI. Payment for physical SGB purchases can be made in cash (up to a maximum of ₹20,000), demand draft, or cheque.
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