Mumbai: The Reserve Bank of India's administered Sovereign Gold Bond of 2020-21 Series VIII will be available this week for investors keen to invest in the yellow metal in India.
Gold rates have shot off in the last week owing to the US election uncertainty and then a Blue Wave which also caused cheer among stock markets. With Dhanteras barely a week away, traders and jewellers believe that Gold rates will continue to swing north. Dhanteras is on Friday, November 13.
Subscriptions for the November SGB have already begun and will be available until Friday, November 13.
For those keen to know, the Sovereign Gold Bond investment works at Rs 5,177 per bond. A single bond is equivalent of one gram of 999 purity Gold. Booking for SGB via electronic mode will fetch investors a Rs 50 discount per bond. Accordingly, the price for digital transactions has been fixed at Rs 5,127 per bond.
The rates quoted by the Government approved scheme is lower than market rates. The Monday closing price according to India Bullion Jewellers Association was reported at Rs 52,420 per ten grams exclusive of 3 percent GST. Retail rates across India move differently. Follow Sify Gold for the latest market price.
The November bonds are slightly higher than the 7th series announced in October. The October series was launched at a price of Rs 5,001 inclusive of the digital discount. September SGB fetched a price of Rs 5,117.
Benefits of Subscribing to SGB:
1. Tax free and regular dividend paying scheme. A 2.5 percent annual interest rate on nominal value is paid in two instalments by the government. SGB has a tenure of 8 years and interest eligibility is 2.50 percent. Premature exit is allowed at fifth year.
2. Cost of storage is eliminated. Held in demat format.
3. No making charges.
4. No STT or capital gains tax.
5. Bonds can be used as a collateral.
However for all the benefits subscribers must know that the SGB sells in secondary markets available on regulated exchanges such as the National Stock Exchange and Bombay Stock Exchange.
Interested subscribers can subscribe for SGBs from scheduled commercial banks. Many banks such as SBI, Axis, ICICI, HDFC etc offer subscription to such schemes. One can also participate in the subscription process from a broking agency, post office or directly with exchanges such as BSE and NSE.
Individual buyers can subscribe for 4 kilos of Gold or 4,000 SGB instruments in a fiscal. For Hindu Undivided family, the restriction is 4 kilos while trusts can subscribe up to 20 kilos. The fiscal year is April - March.