SGB Sovereign Gold Bond Scheme 2020-21 issued by RBI on behalf of the Government of India

SGB Sovereign Gold Bond

The central bank RBI in April had announced that the government of India will issue Sovereign Gold Bonds in six tranches from April 20 till September.

In this article i will tell you about SGB bond, as this issued by central bank RBI on behalf of the Government of India and issue price for Sovereign Gold Bond has been fixed at Rs 4,677 per gram of gold. This bond will issue in six tranches from 20 April 20 till 8 September 20, as series. This bonds will be denominated in multiples of gram(s) of gold with a basic unit of 1 gram and the tenor of the Sovereign Gold Bond will be 8 years with exit option after 5 year to be exercised on interest payment dates. Government has also decided to offer a discount of Rs 50 per gram on the nominal value to investors applying online and making the payment against application through digital mode.

Gold image for SGB

Basic Feature of Sovereign Gold Bond

  • Electronic form of Gold.
  • Issued by RBI on behalf of the Government (No Risk).
  • The bonds will be available in multiples of gram(s) of gold with a basic unit of 1 gram.
  • Bonds will be issued in six tranches and will be in sequence.
  • 6 tranches will be from 20 April 20 till 8 September 20.
  • Tenor will 8 Years with exit option after 5 year.
  • Bond will work as Collateral against Loan.
  • Assurance of Purity – Gold Bond prices are linked to price of Gold of 999 purity (24 carat) published by IBJA

Below image showing 6 tranches Series date:

Scheme Detail in table

Who can buy it :

  • Resident individuals
  • Hindu Undivided Families (HUFs)
  • Trusts
  • Universities
  • Charitable institutions.

From where you can Buy it:

  • Post Office
  • Recognised stock exchanges (NSE and BSE)
  • Notified banks
  • Stock Holding Corporation of India (SHCIL)

What is the Investment Limits:

  • The minimum permissible investment will be 1 gram of gold
  • The maximum 4 kg for individual and HUF
  • 20 kg for trusts and Others

Investment Benefits :

  • Interest Income – You will get 2.5% pa interest in every 6 month.
  • Capital Appreciation income – If gold price rises over time.
  • Tax benefits – After 8 years no any LTCG (Long Term Capital Gain) tax applicable but before 8 years LTCG will be applicable.
  • Bond will work as Collateral against Loan.
  • Assurance of Purity – Gold Bond prices are linked to price of Gold of 999 purity (24 carat) published by IBJA

Why we should choose Sovereign Gold Bond

  • Invesstment will be Risk Free (Issued by RBI on behalf of the Government)
  • Fixed Income (Interest Income)
  • Capital Appreciation income
  • You will get tax benefits after 8 years

How to calculate Issue Price of Sovereign Gold Bond :

The nominal value of the bond or issue price is based on the simple average closing price for gold of 999 purity of the last 3 business days of the week. You can get closing price of bond on website published by India Bullion and Jewellers Association Limited.

To invest in Sovereign Gold Bond click on below image/Option:

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