Sovereign Gold Bond Scheme opens from today: Check issue price, minimum investment limit and more

New Delhi, Aug 22: The issue price for the second tranche of Sovereign Gold Bond Scheme (SGB) 2022-23, which will open for subscription from today and last for five days till August 26, has been fixed at Rs 5,197 per gram of gold, the Reserve Bank of India (RBI) said.

Key dates

The Sovereign Gold Bond Scheme 2022-23 Series II will be open for subscription from August 22 - 26, 2022."The nominal value of the bond...works out to Rs 5,197," the central bank said in a statement.

The central government, in consultation with the Reserve Bank of India, has decided to offer a discount of Rs 50 per gram, less than the nominal value, to those investors applying online and the payment against the application is made through digital mode. "For such investors, the issue price of Gold Bond will be Rs 5,147 per gram of gold," the RBI said.

The RBI issues the bonds on behalf of the Centre.

The bonds will be sold through banks, Stock Holding Corporation of India Limited (SHCIL), designated post offices and recognised stock exchanges - NSE and BSE.

The scheme was launched in November 2015 with an objective to reduce the demand for physical gold and shift a part of the domestic savings - used for the purchase of gold - into financial savings.

The price of the bond is fixed in Indian currency on the basis of a simple average closing price of gold of 999 purity, published by the India Bullion and Jewellers Association Limited for the last 3 working days of the week preceding the subscription period.

The bonds are denominated in multiples of gram (s) of gold with a basic unit of 1 gram. They have a maturity period of 8 years with an exit options available at the end of 5th year to be exercised on the interest payment date.

Minimum and maximum permissible investment limit

The minimum permissible investment is 01 gram of gold. The maximum limit of subscription is 4 KG for individuals, 4 Kg for HUF and 20 Kg for trusts and similar entities per fiscal (April-March).

The Know-your-customer (KYC) norms will be the same as that for the purchase of physical gold.

What is Sovereign Gold Bond Scheme?

Sovereign gold bonds are cost effective when compared to possessing physical gold. It is ideal to possess gold in the form of sovereign bonds because when you purchase and sell jewellery, you incur the loss of 15-20 towards making charges every time you change gold form. You may possess sovereign gold bonds (SGBs) in the form of physical certificates or in your demat account. You can also escape the worries of maintenance of gold and loss in translation in the form of SGBs, according to Motilal Oswal.

Who can buy Sovereign Gold Bond Scheme?

The Bonds will be restricted for sale to resident individuals, HUFs, Trusts, Universities and Charitable Institutions.