The second tranche of the Sovereign Gold Bond Scheme 2023-24 opened for subscription on Monday, September 11, 2023. The latest issuance of these bonds, backed by the Government of India (GoI), will remain available for subscription until Friday, September 15. The Reserve Bank of India (RBI) fixed the issue price at ₹5,923 per gram of gold.
The nominal value of the bond is based on the simple average of closing prices on September 6, 7, and 8, according to data published by the India Bullion and Jewellers Association Ltd (IBJA). For investors who apply online and pay digitally against their application, the issuance price is discounted by ₹50 per gram from the nominal value.
Sovereign Gold Bonds (SGBs) offer a viable alternative to physical gold investment, providing opportunities for capital appreciation while earning interest. These bonds minimize several risks associated with physical gold and offer an annual interest rate of 2.5%. They have an eight-year maturity tenure.
State Bank of India (SBI) has highlighted several advantages to investing in SGBs, including assured returns of 2.5% per annum payable half-yearly, no storage hassles like physical gold, no Capital Gain Tax on redemption, liquidity, and potential use as collateral for loans. SBI also noted that there are no GST and making charges associated with these bonds.
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