About Sovereign Gold Bond SchemeThe government's sovereign gold bond scheme for 2020-21 Series-IV to start for subscription from July 06, 2020 to July 10, 2020. The Bond is issued by Reserve Bank on behalf of Government of India. The government has fixed the rate at Rs 4,852 for a gram of gold. The bonds will be issued on July 14, 2020. The bonds would be sold through banks, Stock Holding Corporation of India Limited, designated post offices, and stock exchanges - National Stock Exchange and BSE. The scheme offers benefits similar to the earlier tranche of 2.5% interest and exemption on capital gains tax on redemption. The government launched the sovereign gold bond scheme in November 2015 to channelize a part of domestic savings, used for purchasing physical gold, to financial savings and thus lower the demand for the precious yellow-metal. |
Disclaimer: Plesae read the documents caeefully. These details are for your information purpose and are not intend or asking to invest. Reuesting you to make own decision before investing.
Issuer DetailsThe Bond is issued by Reserve Bank on behalf of Government of India. Under the scheme, the bonds are denominated in units of one gram of gold and multiples thereof. Minimum investment in the bonds is one gram with a maximum limit of subscription of 500 grams per person per fiscal year. |
Comparison Metrics |
| Particulars | Sovereign Gold Bond | Physical Gold | Gold ETF |
|---|---|---|---|
| Returns | Higher than actual return on gold | Lower than actual return on gold | Lower than actual return on gold |
| Sovereign guarantee | Yes | Not Applicable | No |
| Safety | High | Risk of handling physical gold | High |
| Purity of Gold | High as it is in Electronic Form | Purity of Gold always remains a question | High as it is in Electronic Form |
| Redemption/Exit Route | After 5 years | Anytime | Anytime |
| Liquidity | Limited | Highly Liquid | Highly Liquid |
| Storage Cost | Very Low | High | Very Low |
| Brokerage/Charges | No | No | Yes |
| Quality Check | No | Yes, Quality Check is Must | No |
| Interest Payment | Yes, @ 2.5% p.a. | No | No |
| Long Term Capital Gains (LTCG) | Applicable after 3 years. (No Capital gain tax if held till maturity ) | Applicable after 3 years | Applicable after 3 years |
Details of Bond Issue
Sovereign Gold Bond Scheme key details
| Particulars | Details |
|---|---|
| Opening Date | 6-Jul-2020 |
| Closing Date | 10-Jul-2020 |
| Discount | ₹ 50 for online payment mode |
| Face Value (Online) | ₹ 4,802/ gm |
| Face Value (Offline) | ₹ 4,852/ gm |
| Bid Lot | 1gm and multiples thereof upto 4,000gm |
| Minimum Bid Amount | ₹ 4,802 - ₹ 4,852/- |
| Interest Payment | 2.50%/annum payable semi-annually on the nominal value. |
| Tenor | 8 Years |
| Premature Redemption | Early exit option after 5 years, to be exercised on interest payment dates only |
| Listing on | Stock Exchange |
| Mode of Payment | Cash payment (upto ₹ 20,000) or demand draft or cheque or electronic banking |
Above details may change. Typo error could possible. Please contact us to update details
Tentative Dates
Below are the indicative dates for the IPO
| Particulars | Details |
|---|---|
| Opening Date | 6-Jul-2020 |
| Closing Date | 10-Jul-2020 |
| Date of Issue | 14-Jul-2020 |
| Premature Redemption | 14-Jan-2026 (Tentative) |
| Date of Redemption | 14-Jul-2028 (Tentative) |
| Listing on Stock Exchange/s | around 15 days |
Above dates are tentative and may change upon unforeseen circumstances
Application of bonds
Below are the sources where application can be made
| The application form will be provided by the following |
|---|
| Banks |
| Stock Holding Corporation of India Ltd. (SHCIL) |
| Designated Post Offices |
| Agents |
Issuer |
| Name of Issuer/s |
|---|
| SGBs are government securities denominated in grams of gold. They are substitutes for holding physical gold. Investors have to pay the issue price in cash and the bonds will be redeemed in cash on maturity. The Bond is issued by Reserve Bank on behalf of Government of India. |
Frequently Asked Questions (FAQ):
Bonds will be sold through Commercial banks, Stock Holding Corporation of India Limited (SHCIL), designated post offices (as may be notified) and recognised stock exchanges viz., National Stock Exchange of India Limited and Bombay Stock Exchange, either directly or through agents.
Payment for the Bonds will be through cash payment (upto a maximum of ₹ 20,000) or demand draft or cheque or electronic banking.
One can buy minimum 1gm and in multiples thereoff. Maximum limit of subscription for individuals is 4,000gms.
Every application must be accompanied by the ‘PAN Number’ issued by the Income Tax Department to the investor(s).
Yes, Bonds will be tradable on stock exchanges within a fortnight of the issuance on a date as notified by the RBI.
Nominal value is declared by RBI based on the average closing price of 999 purity gold for the last three business days preceding to the issue as published by the Indian Bullion and Jewellers Association Limited.
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