Sovereign Gold Bond open for subscription: 8 reasons to buy
The nominal value of the bond is based on the simple average of closing price for gold of 999 purity of the last three working days of the week preceding the subscription period which is between 01 March and 03 March 2023 worked out to be Rs 5,611...
By Shivendra Kumar, ETMarkets.com |
IANSHINDI
The fourth tranche of Sovereign Gold Bond Scheme 2022-23 opened for subscription on Monday. The SGB is being offered at a price of Rs 5,611 per gram while an additional discount of Rs 50 is being given to investors applying for it online. The issue closes on Friday, 10 March, 2023.
For investors applying online, the issue price of Gold Bond will be Rs 5,561 per gram of gold.
The nominal value of the bond is based on the simple average of closing price for gold of 999 purity of the last three working days of the week preceding the subscription period which is between 01 March and 03 March 2023 worked out to be Rs 5,611 per gram of gold, RBI said in a press release.
The SGBs is denominated in multiples of gram(s) of gold with a basic unit of 1 gram and its sale is restricted for resident individuals, HUFs, Trusts, Universities and Charitable Institutions.
The tenor of the SGB is for a period of 8 years with an option of premature redemption after 5th year. The minimum permissible investment is 1 gram of gold while the maximum permissible limit is 4 kg for individual investors during a financial year.
The government gives a fixed rate of interest of 2.50 per cent per annum payable semi-annually on the nominal value.
Personal finance expert Jitendra Solanki recommends a strong buy on SGB, notwithstanding the current rally in the yellow metal. He said that investment in SGBs over a long term will yield significant profits to the investors.
Solanki lists 8 Reasons why you must buy SGBs:
1) SGBs are good long term investment bets and capital appreciation is likely to happen significantly if one holds it for 8 years.
2)There is no risk of purity.
3)No risk of default as it is backed by Sovereign guarantee.
4)No capital tax gains if held for 8 years.
5)SGBs are traded on exchanges hence are highly liquid, unlike physical gold.
6)Investors get 2.5 per cent interest on investment which is payable semi-annually.
7)Can be pledged as collateral if one seeks a loan.
8)Retail investors get SGBs on discount if the application is made online.
(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of Economic Times)
For investors applying online, the issue price of Gold Bond will be Rs 5,561 per gram of gold.
The nominal value of the bond is based on the simple average of closing price for gold of 999 purity of the last three working days of the week preceding the subscription period which is between 01 March and 03 March 2023 worked out to be Rs 5,611 per gram of gold, RBI said in a press release.
The SGBs is denominated in multiples of gram(s) of gold with a basic unit of 1 gram and its sale is restricted for resident individuals, HUFs, Trusts, Universities and Charitable Institutions.
The tenor of the SGB is for a period of 8 years with an option of premature redemption after 5th year. The minimum permissible investment is 1 gram of gold while the maximum permissible limit is 4 kg for individual investors during a financial year.
The government gives a fixed rate of interest of 2.50 per cent per annum payable semi-annually on the nominal value.
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Personal finance expert Jitendra Solanki recommends a strong buy on SGB, notwithstanding the current rally in the yellow metal. He said that investment in SGBs over a long term will yield significant profits to the investors.
Solanki lists 8 Reasons why you must buy SGBs:
1) SGBs are good long term investment bets and capital appreciation is likely to happen significantly if one holds it for 8 years.
2)There is no risk of purity.
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3)No risk of default as it is backed by Sovereign guarantee.
4)No capital tax gains if held for 8 years.
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5)SGBs are traded on exchanges hence are highly liquid, unlike physical gold.
6)Investors get 2.5 per cent interest on investment which is payable semi-annually.
7)Can be pledged as collateral if one seeks a loan.
8)Retail investors get SGBs on discount if the application is made online.
(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of Economic Times)
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