The Reserve Bank of India (RBI) recently disclosed the issuance details for the upcoming tranche of the Sovereign Gold Bond (SGB) Scheme 2023-24 – Series III. Set to open on December 18 and available for subscription until December 22, 2023, the SGBs present an opportunity for investors to acquire gold in a non-physical form.
For this tranche, the issue price of the Sovereign Gold Bond has been established at Rs.6,199 per gram. However, the central bank also announced an exclusive provision for investors applying online and making payments through digital modes. These individuals will benefit from a discount of Rs.50 per gram, reducing the issue price to Rs.6,149 per gram of gold.
The issuance process will be facilitated through various channels, including scheduled commercial banks (with exceptions for small finance banks, payment banks, and regional rural banks), entities like Stock Holding Corporation of India Limited (SHCIL) and Clearing Corporation of India Limited (CCIL), designated post offices, as well as stock exchanges like National Stock Exchange of India Limited and Bombay Stock Exchange Limited.
This Series III of the Gold Bond Scheme is part of a scheduled release, with Series IV set to open for subscription between February 12 and 16. The previous tranches, Series I and II, were available for subscription from June 19-23 and September 11-15, respectively, this fiscal year.
The SGBs offer an attractive compensation structure, providing investors a fixed rate of 2.50 per cent per annum, paid semi-annually on the nominal value. Additionally, there are specific subscription limits per fiscal year: 4 kg for individuals, 4 kg for Hindu Undivided Families (HUFs), and 20 kg for trusts and similar entities.
As outlined by the finance ministry, the tenure for these bonds spans eight years, offering investors the flexibility of premature redemption after the completion of the fifth year, coinciding with the interest payment date.
The RBI, acting on behalf of the central government, administers the issuance of these bonds. The SGBs not only provide an opportunity for investors to diversify their portfolios with gold but also offer a secure investment avenue in a non-physical form.
The Sovereign Gold Bond Scheme Series III presents an enticing opportunity for investors to participate in gold ownership while leveraging digital modes for ease of access and a reduced issue price, further bolstering the appeal of this investment avenue.