Sovereign Gold Bonds 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 Bond is issued by the Reserve Bank on behalf of the Government of India. This year, the Sovereign Gold Bond 2020-21 – Series VIII. will be launched from November 09th to November to 13th 2020 for issuance and subscription, which happens to be right ahead of Dhanteras.
The Issue Price for Online payment Mode is 5127 rupees. And the Issue Price for Other Modes is 5177 rupees. The Bonds bear an interest at the rate of 2.50%(which is a fixed rate) per annum on the amount of initial investment. The interest gets credited semi-annually to the bank account of the investor while the last interest is payable on account of maturity along with the principal account.
Reason to invest in Sovereign Gold Bonds Series VIII?
There are several important factors that you must consider before investing in Sovereign gold bonds for the financial year 2020-2021.
- To store and buy the gold it is the safest way.
- On your investment in this gold bond you will receive an assured return of 2.5% per annum.
- You will get the opportunity of getting asset interest as well as asset appreciation.
- Gold bonds are tradable in stock exchange as it is being issued by the Government of India.
- No TDS is charged on this bond.
- On redemption of this gold bond there is no tax on the capital gain.
- It can be easily convertible in Demat form.
- You will receive the indexation benefit if the bond is being transferred before the tenure of its maturity.
Salient features of the Gold bonds 2020-2021 Series VIII
| Issue | Sovereign Gold bond 2020-2021 series VIII |
| Date of opening issue | 9th November 2020 |
| Closing date of the issue | 13th November 2020 |
| Issue price of the Gold | Rs 5177/- per gram |
| Session time of the bonding | 9:00 am to 3:00 pm |
| Minimum quantity for bid | 1 gram |
| Main mode of instrument for insurance | Physical/Demat mode |
| Rate of discount | Rate of discount is Rs 50/- (Rs 5127) for those who are making the payment in the online mode. |
Know more about Sovereign Gold bond
When the Government securities are denominated in grams of Gold it is known as Sovereign Gold Bonds. The substitutes of physical hold are the gold bond. If you want to invest on those bonds then you need to pay amount equivalent to issue price that will be redeemed in your bank account equal to Gold price at the time of maturity. On behalf of Government of India Reserve Bank of India issue this bond.
Benefits
The investor will get the amount on the sell of his gold on the current market price if he holds the gold in physical form with himself. Gold bonds will help you to get the returns on your investment with appreciation in gold price along with 2.5% interest. The security and the safety of your gold items will be kept intact and you will get better returns in your investment on your current as well as on your future market price.
Are there any risks in SGB’s?
If the market price of the gold declines then there will a capital loss for the investor. However, the investor will not lose the units of gold for which he has made the payment.
Eligibility
Under the Foreign exchange management act 1999 a person who is the resident of India are eligible to invest in SGB. This may include the individuals, HUF’s, institutions and the charitable trust. Till the redemption and the maturity of the SGB the Subsequent non residents who are changing their residential status frequently cam hold the benefits of this bonds.
The joint holding is allowed for the investors.
On the behalf of the minor his parents can make an investment in the name of his minor.
How to Apply
There are various sources from where investors can collect the application forms for SGB’s like from banks, SHCIL offices, agents, and designated post offices. From the website of RBI you can easily download the forms.
KYC norms
The investor must possess the PAN number that is being issued by the income tax department of India.
Minimum and the maximum limit of the investment
The minimum investments that you can make on Gold bonds are 1 gram and maximum is 4 kg in case of the individuals. 4 kg in case HUF is the minimum rate and 20 Kg is minimum in case 20 kg for trust and for the other entities.
Payment Options
Payments can be easily made through electronic transfers, cash or demand draft or cheque (up to Rs 20000).
Hence these are some if the basic questions that you need to know while you make an investment in the SGB in this current fiscal year. Be cautious while making your investment and follow the rules as guided by RBI.
