Sovereign Gold Bond 2023-24 Series IV to open on Feb 12. Here are the details.
The subscription for SGBs will open for five days, from February 12 to February 16, 2024. The issuance is scheduled for February 21, 2024.
The last tranche, Sovereign Gold Bond Series 2023-24 Series III, subscription period opened on December 18 and closed on December 22, 2023.
Sovereign Gold Bonds investment: The last subscription of the Sovereign Gold Bonds (SGBs) 2023-24 Series IV is scheduled to open on February 12 (Monday). The subscription for SGBs will open for five days, from February 12 to February 16, 2024. The issuance is scheduled for February 21, 2024.
The last tranche, Sovereign Gold Bond Series 2023-24 Series III, subscription period opened on December 18 and closed on December 22, 2023. The date of issuance in SGB Series III was December 28, 2023.
Floated by the Indian Government in 2015, Sovereign Gold Bonds or SGBs emerged as an innovative investment strategy involving gold for interested investors. The SGBs are recognised as Government of India Stock under the Government Securities Act, 2006.
These bonds yield a favourable annual interest rate of 2.50 per cent, credited twice yearly to the account of the investor, with the culminating interest payment proceeding at maturity.
The SGBs are denominated in grams of gold multiples, with a fundamental unit of one gram. The tenor of the SGB is eight years and investors do have an option for premature redemption after the fifth year, which can be availed of on the date interest is payable.
Upon maturity, these bonds incur no tax on redemption. This makes them an attractive option for long-term investors. Although Sovereign Gold Bonds (SGBs) may possess less liquidity compared to tangible gold assets, they have the advantage of being tradable on stock exchanges within a mere two weeks from their date of issuance.
How to buy SGBs
SGBs can be bought through scheduled commercial banks (excluding small finance banks, payment banks, and regional rural banks), Stock Holding Corporation of India (SHCIL), Clearing Corporation of India (CCIL), designated post offices, National Stock Exchange of India, and Bombay Stock Exchange.
Valuation of SGBs
The valuation of SGBs is determined by the average closing price of 999 purity gold over the preceding three working days before the subscription period (February 7 to February 9). Online subscriptions with digital payments enjoy a discount of Rs 50 per gram. The most recent tranche of SGBs issued in December 2023, was priced at Rs 6,199 per gram. For individuals, the minimum investment is one gram, while the maximum subscription limit is 4 kg.
Return on SGBs
The first series of SGBs floated 2015 matured in 2023-end yielding annual returns of 12.9 per cent. In comparison, the yellow metal averaged 11.2 per cent returns in the last 20 years. The SGBs issued on February 8, 2016, (SGB 2016-I) matured on February 8, 2024. While the premature redemption window for another series – the SGB 2016-17 Series I issued on August 5, 2016 – was opened on February 5, 2024.
