Investors redeemed SGB of 0.2% or 0.17 million units (1 unit = 1 gm) with returns in the range of 8-11%, making the scheme more attractive.
| Year | Series | Issue Price (₹/gm) - Offline | Issue Price (₹/gm) - Online |
|---|---|---|---|
| 2015 | I | 2,684 | 2,634 |
| 2016 | I | 2,600 | 2,550 |
| 2016 | II | 2,916 | 2,866 |
| 2016-17 | I | 3,119 | 3,069 |
| 2016-17 | II | 3,150 | 3,100 |
| 2016-17 | III | 3,007 | 2,957 |
Redemptions from the above schemes are now available and investors can now opt to redeem the same.
- ~3.1% or 0.03 million units have been redeemed from the first series of 2015.
- ~2.1% or 0.06 million units have been redeemed from the first series of 2016.
- ~2.4% or 0.03 million units have been redeemed from the second series of 2016.
- ~0.3% or 0.01 million units have been redeemed from the first series of 2016-17.
- ~1.0% or 0.03 million units have been redeemed from the first series of 2016-17.
- ~0.5% or 0.02 million units have been redeemed from the first series of 2016-17.
| Year | Series | CMP - NSE (₹/gm)* | Indicative IRR (%) (Offline Issue price) |
|---|---|---|---|
| 2015 | I | 4,845 | 11.4% |
| 2016 | I | 4,769 | 12.2% |
| 2016 | II | 4,701 | 9.5% |
| 2016-17 | I | 4,720 | 8.2% |
| 2016-17 | II | 4,690 | 8.1% |
| 2016-17 | III | 4,727 | 9.5% |
Key Benefits of SGB
1 | Interest Rate benefit Bonds bear 2.5% interest rate per annum on the initial investment. Interest will be credited semi-annually to the bank account of the investor and the last interest will be payable on maturity along with the principal. Interest on the Bonds will be taxable as per the provisions of the Income-tax Act, 1961 (43 of 1961). |
|---|---|
2 | Capital Gains Tax benefit No Capital gain tax if bonds held till maturity (Applicable after 3 years). The capital gains tax arising on redemption of SGB to an individual has been exempted. The indexation benefits will be provided to long terms capital gains arising to any person on transfer of bond. |
3 | Avoid Risk and Storage Cost SGB's helps to save on cost spent to store physical Gold. The risks and costs of storage are eliminated. |
4 | Quality Check not required Quality check is must while buying physical gold while it is not required to buy SGB. |
5 | Discount of Rs50/gm for Online Subscription Online customers will have additional advantage to avail discount. Discount of ₹50/- per gram to investors applying online and payment made through digital mode. |
Comparison Metrics
Below metrics provide comparison of SGB with Physical and Gold ETF
| 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 |
Application Forms
| The application form will be provided by the following |
|---|
| Banks |
| Stock Holding Corporation of India Ltd. (SHCIL) |
| Designated Post Offices |
| Agents |
Above details are indicative and may change
Frequently Asked Questions (FAQ):
How to Buy Sovereign Gold Bonds?
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.
What are Payment options?
Payment for the Bonds will be through cash payment (upto a maximum of ₹ 20,000) or demand draft or cheque or electronic banking.
What is minimum and maximum quantity one can buy?
One can buy minimum 1gm and in multiples thereoff. Maximum limit of subscription for individuals is 4,000gms.
What are the Know-Your-Customer (KYC) norms?
Every application must be accompanied by the ‘PAN Number’ issued by the Income Tax Department to the investor(s).
Are these bonds tradable?
Yes, Bonds will be tradable on stock exchanges within a fortnight of the issuance on a date as notified by the RBI.
Can I get the bonds in demat form?
Yes. The bonds can be held in demat account. A specific request for the same must be made in the application form itself. Till the process of dematerialization is completed, the bonds will be held in RBI’s books. The facility for conversion to demat will also be available subsequent to allotment of the bond.
How issue price is arrived?
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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