RBI has recently announced the Sovereign Gold bonds scheme and it is one of the safest ways to hold your Gold. Sovereign Gold Bonds is a better way to make an investment on Gold in the online mode. By investing in sovereign bonds, you need not to store your gold on a physical locker. These gold bonds are being stored by the Government of India in a safer manner. Along with the price appreciation benefit, you will also receive a 2.5% interest on the amount invested in gold that are there in the form of Sovereign Gold bonds. Hence you can easily enjoy safety and will receive good amount of interest on your gold bonds.
Why should you invest in Sovereign Gold Bonds Series IV?
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 IV
| Issue | Sovereign Gold bond 2020-2021 series IV |
| Date of opening issue | 6th July 2020 |
| Closing date of the issue | 10th July 2020 |
| Issue price of the Gold | Rs 4852/- per gram |
| Session time of the bonding | 9:00 am to 5:00 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 4802) for those who are making the payment in the online mode. |
There are some common questions or you can say the FAQ’s that arises in the minds of many people while they will invest in Sovereign Gold Bonds. Therefore, let’s address those important questions one after the other in order to get a better insight of these Gold bonds.
What do you mean by Sovereign Gold bond and who can issue it?
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.
What are the benefits of buying SGB rather than Gold?
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.
Who are eligible for the SGB?
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.
Do joint holding is allowed?
The joint holding is allowed for the investors.
Can a minor make an investment in the SGB?
Yes on the behalf of the minor his parents can make an investment in the name of his minor.
From where the investors can collect the application form of SGB bonds?
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.
What are the KYC norms you need to maintain in order to receive the gold bonds?
The investor must possess the PAN number that is being issued by the income tax department of India.
What are the minimum and the maximum limit of the investment on the bonds?
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.
What are the payment options for the SGB’s ?
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.
