Series-II of sovereign gold bond opens for subscription at Rs 4,639/gm

The issue closes on Friday, May 15. The certificate of bond(s) will be issued on May 19.

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Investors would get a 2.50 per cent interest on the amount of initial investment, which will take effect from the date of its issue and will be payable every six months.
NEW DELHI: The series-II of the sovereign gold bond (SGB) scheme 2020-21 opened for subscription on Monday. Prospective bidders, who intend to subscribe to the scheme, can bid for a minimum of 1 gm of gold at Rs 4,590 per gm. There will be a Rs 50 discount for investors who bid online.

The issue closes on Friday, May 15. The certificate of bond(s) will be issued on May 19.

You can subscribe to the issue via your bank. Besides, these bonds are also being sold through the Stock Holding Corporation of India (SHCIL), designated post offices, NSE and BSE, either directly or through agents.


“SGBs are to be treated more as an asset diversification strategy rather than to earn superior returns. Doing a SIP in every tranche of gold can be considered by investors who are either under-invested in gold or have regular fresh monies for allocation among various asset classes or need to accumulate gold for weddings or other auspicious occasions,” said HDFC Securities.

Investors would get a 2.50 per cent interest on the amount of initial investment, which will take effect from the date of its issue and will be payable every six months. Besides, they can also see capital gains at the time of redemption, in case the price at the time of redemption is higher, said ICICI Bank.

SGBs are government securities denominated in grams of gold. They are substitutes for holding physical gold. Investors have to pay the issue price in cash and the bonds will be redeemed in cash on maturity. The bonds are issued by RBI on behalf of the government.
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The tenor of the bond will be for a period of eight years with exit option in 5th, 6th and 7th year, to be exercised on the interest payment dates. Besides, bonds will be tradable on stock exchanges within a fortnight of the issuance.

Among the benefits of subscribing to SGB is attractive interest with asset appreciation opportunity, redemption being linked to gold price, elimination of risk and cost of storage, exemption from capital gains tax if held till maturity and a hassle free holding as it eliminates the storage cost of physical gold, said HDFC Securities.
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