Know All About Sovereign Gold Bond Scheme (SGB)

 

 

The first time Sovereign Gold Bond Scheme was first introduced by the Government of India in the Union Budget of 2015-16. It was introduced by the Government of India to reduce the demand for the physical gold form and a part of this physical gold is bought every year in the form of gold bands for the purpose of invest in SGB.

 

Latest on Sovereign Gold Bond Scheme 

 

A tenth tranche of the buy SGB Series – The Sovereign Gold Bond Scheme 2021-22 - Series X in which the Reserve Bank of India (RBI) sell gold bonds linked to the market price of gold on behalf of the government made available for investment will be open for buy SGB for the period from February 28th to March 4th.

 

What is Sovereign Gold Bond?

 

The Sovereign Gold Bond is an initiative taken by the Government of India to reduce the demand for physical gold as per the Reserve Bank of India as the increasing import of gold is affecting the growth and investment of India. Large quantities of physical gold in the form of gold bars and coins are kept as savings in every Indian household families. Thus the objective of the Sovereign Gold Bond Scheme is to invest this physical gold in financial savings through gold bonds, like paper gold. The SGB maturity of these gold bonds is 8 years which can be prematurely cancelled after 5 years on the interest payment dates.

 

The Sovereign Gold Bond Scheme was launched in the year of 2015 under the Gold Monetization Scheme of the Government of India. The Gold Monetization Scheme was launched in the year of 1999 launched by the Government of India to replace the existing Gold Deposit Scheme (GDS). The Gold Deposit Scheme (GDS) allows gold depositors to earn 2.25% interest annually. For short term deposits of one year to three years.

 

Who can apply for Sovereign Gold Bond Scheme?

 

A Gold Bond investment scheme can be availed by all Indians who fulfil these conditions.

 

• A person must be an Indian resident, as per the Foreign Exchange Management Act 1999, to fulfil the eligibility criteria under the Gold Bond Scheme.

 

• Any individual/HUF/Union/Trust who is a resident of India is eligible to invest in Sovereign Gold Bond Scheme. They can also invest jointly in these gold bonds as per the eligibility criteria of the scheme.

 

• This Sovereign Gold Bond scheme can also be availed by minors provided this Sovereign Gold Bond is purchased by the parents on their behalf.

 

Benefits of Sovereign Gold Bond Scheme

 

• Sovereign Gold Bond Scheme offers flexible gold denominations in terms of buying gold. These gold bonds are available in denominations ranging from a minimum of one gram to several weights.

 

• Sovereign Gold Bonds can be obtained either in paper or in Demat form as per the convenience of the individual.

 

• Sovereign Gold Bonds also provide flexible investment where one can choose the amount he/she wants to invest.

 

• The interest paid for Sovereign Gold Bond is 2.50% p.a. which can be paid half-yearly at the nominal value.

 

• The Sovereign Gold Bond will have a tenor of 8 years, with an exit option available in the 5th, 6th and 7th years, to be exercised on the interest payment dates.

 

• Sovereign Gold Bonds invested by investors can be gifted or transferred to others who are eligible under the scheme. They can also sell sovereign gold bonds on the stock exchanges subject to the notification of the Reserve Bank of India.

 

• These Sovereign Gold Bonds can be purchased through multiple payment modes such as cheque, cash, DD or electronic transfer and buy gold bond online. People can take loan against sovereign gold bond.