New issue of Sovereign Gold Bond scheme opens today: 10 things to know

The second tranche of the Sovereign Gold Bond Scheme 2022-23 - Series II opens for subscription today, 22 August. The Sovereign Gold Bond Scheme 2022-23 - Series II second tranche subscription will remain open till 26 August. The date of issuance is 30 August. The price has been fixed at Rs 5,197 per gram of gold. According to a statement by the Reserve Bank of India, “The nominal value of the bond based on the simple average closing price [published by the India Bullion and Jewellers Association Ltd (IBJA)] for gold of 999 purity of the last three working days of the week preceding the subscription period, i.e. August 17, August 18, and August 19, 2022 works out to ₹5,197/- (Rupees Five thousand one hundred and ninety seven only) per gram of gold.”

As the subscription for the second tranche of the Sovereign Gold Bond Scheme 2022-23 - Series II opens, here are 10 things you need to know:

1. Sovereign Gold Bonds (SGBs) are issued by the RBI on behalf of the Union Government.
2. The bonds will be sold by the stock exchanges (BSE and NSE), the Stock Holding Corporation of India Limited (SHCIL), scheduled commercial banks and designated post offices.
3. There is a discount of Rs 50 per gram for investors applying for the bonds through online mode.
4. The Sovereign Gold Bond scheme requires a minimum investment of one gram of gold. The maximum amount of investment is 4 kg for individuals and the Hindu Undivided Family (HUF) per fiscal year (April- March). For trusts and other charitable entities s notified by the government, the maximum limit for investment is 20 kg.
5. The interest rate on the bonds is 2.50 percent (fixed rate) per annum on the amount of initial investment.
6. The interest will be credited to the bank account of the investor semi-annually, as per the RBI.
7. The Sovereign Gold Bonds have a tenor of eight years. However, there is an exit option after the fifth year from the date of issue on coupon payment dates.
8. If the SGBs are held in demat form, they are tradable on the stock exchanges.
9. The SGBs can also be transferred to any other eligible investor.
10. Tax deducted at Source (TDS) is not applicable on the gold bonds. However, it is the responsibility of the investor to comply with the relevant tax laws.

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