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Sovereign Gold Bond Scheme Opens Monday: Price, Dates, Discount; How to Buy

Individuals can buy gold bonds from commercial banks, Stock Holding Corporation of India Limited

Individuals can buy gold bonds from commercial banks, Stock Holding Corporation of India Limited

The issue price of the RBI's Sovereign Gold Bond, open from November 29 to December 3 has been fixed at Rs 4,791 for one gram, the finance ministry has said.

Sovereign Gold Bond Scheme: The Government of India has announced the dates for opening the eighth tranche of the Sovereign Gold Bond for subscription. The window will open on Monday, October 29 and will continue for five days to close on December 3, which is Friday. The Reserve Bank of India has also notified the issue price of Sovereign Gold Bond (SGB) Scheme 2021-22 - Series VIII. The issue price of the Bond has been fixed at Rs 4,791 for one gram, the finance ministry has said in a notification. Last month, too, the price was fixed at the same rate by the Reserve Bank of India.

The Sovereign Gold Bonds will be issued in four tranches from October 2021 to March 2022, the RBI has said in its press release. The rate of interest will be applied at a fixed rate of 2.50 percent per annum payable semi-annually on the nominal value. Introduced in 2015, the Sovereign Gold Bonds are government securities denominated in grams of gold.

The Bond will be fixed in Indian Rupees on the basis of a simple average of the closing price of gold of 999 purity, the Reserve Bank has said. India Bullion and Jewellers Association Limited will be publishing the issue price of the Bond for the last three working days of the week preceding the subscription period.

Similarly, the redemption price will be in Indian Rupees based on the average closing price of gold of 999 purity, of the previous three working days published by IBJA Ltd. The settlement date has been fixed on December 7 this year, the government notified.

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“In terms of Government of India Notification No.4(5)-B(W&M)/2021 dated October 21, 2021, Sovereign Gold Bonds 2021-22 (Series VIII) will be opened for subscription during the period November 29- December 03, 2021 with Settlement date December 07, 2021," the finance ministry said in a statement on Friday.

While the price is fixed at Rs 4,791 for each gram, people who subscribe online and pay in a digital mode will have to pay Rs 50 less per gram of gold, the bank said. This was to give a boost to the government’s idea of ‘Digital India’.

“The Government of India in consultation with the Reserve Bank of India has decided to allow discount of Rs 50 (Rupees Fifty only) per gram from the issue price to those investors who apply online and the payment is made through digital mode. For such investors the issue price of Gold Bond will be Rs 4,741 (Rupees Four thousand seven hundred forty one only) per gram of gold," read the finance ministry statement.

Any person who is a resident of India as defined under Foreign Exchange Management Act, 1999 is eligible to invest in Sovereign Gold Bonds. Members of Hindu undivided families, trusts, universities and charitable institutions are also eligible to invest in this scheme. Apart from this, minors are also eligible to invest, given that his or her application form is submitted by a guardian.

An individual can buy Sovereign Gold Bonds through various ways, including digitally. To opt for the digital method, one can apply via the websites of the listed scheduled commercial banks. Additionally, one will get a discount of Rs 50 per gram if he or she chooses to apply online.

For cash payments, an individual can pay up to a maximum of Rs 20,000 while buying these bonds. One can also choose to pay demand draft or cheque or electronic banking.

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first published:November 27, 2021, 16:12 IST