The Centre and Reserve Bank of India (RBI) backed Sovereign Gold Bond Scheme 2023–24 Series III schedule for the fiscal year 2023-2024, which opened for subscription on December 18, will close for subscriptions on December 22, 2023 (Friday). The issuance of these bonds is scheduled for December 28, 2023.
Last week, RBI announced that the issue price for the next tranche of Sovereign Gold Bond has been fixed at Rs 6,199 per gram . “The nominal value of the bond based on the simple average of closing price (published by the IBJA) for gold of 999 purity of the last three working days of the week preceding the subscription period, i.e. December 13, December 14, and December 15, 2023 works out to be Rs 6,199 per gram of gold,” the central bank said in a notification on December 15.
The Sovereign Gold Bond (SGB) scheme was launched by the government in November 2015, under Gold Monetisation Scheme. SGBs are government securities denominated in grams of gold. They serve as a substitute for holding physical gold.
Here’s how you can buy them
The SGBs can be bought through scheduled commercial banks (except small finance banks, payment banks and regional rural banks), Stock Holding Corporation of India Limited (SHCIL), Clearing Corporation of India Limited (CCIL), designated post offices, National Stock Exchange of India Limited and Bombay Stock Exchange Limited.
Investors purchase these bonds at the issue price using cash and receive cash upon maturity when the bonds are redeemed. But if someone decides to purchase them online, the issue price will be less by Rs 50 per gram. For such investors, the issue price reduces to Rs 6,149 per gram.
Investors can purchase SGBs online by following these steps:
Log in to Net Banking Account
Select ‘e-Service’ and then go for Sovereign Gold Bond
If investing for the first time, one has to register online with Aadhaar and PAN card details
Review RBI’s terms, input SGB scheme details, and depository participant details
Submit Registration Form
Fill input subscription quantity, and nominee details
Enter the OTP sent to the registered mobile phone to complete the purchase
SGBs in the secondary market
Buying SGBs is better than other gold investments as capital gains at maturity are tax free. It is to be noted that even after the subscription period closes, SGBs can still be acquired from the secondary market.
To buy them from the secondary market, investors need to have a Demat account to subscribe to these bonds during the subscription period. SGBs are sold and bought on exchanges like the National Stock Exchange (NSE) and Bombay Stock Exchange (BSE) where one can track the bond prices. Orders can be made through a broker or you can use the broker app.
While buying from a secondary market, investors should remember that given the dearth of sellers in the market, purchasing in bulk might raise bond prices considerably. Therefore, they might have to shell out more. Besides, SGBs’ secondary market frequently sees low trading volumes.
Sovereign Gold Bond issue prices in FY24
Sovereign Gold Bonds 2023-24 (Series I): Rs 5,926 per gram
Sovereign Gold Bonds 2023-24 (Series II): Rs 5,923 per gram
Sovereign Gold Bonds 2023-24 (Series III): Rs 6,199 per gram
Sovereign Gold Bond issue prices in FY23
Sovereign Gold Bonds 2022-23, Series I Rs 5,926
Sovereign Gold Bonds 2022-23, Series II Rs 5,926
Sovereign Gold Bonds 2022-23, Series III Rs 5,409
Sovereign Gold Bonds 2022-23, Series IV Rs 5,611
The tenure of SGBs is eight years, but investors have an option of premature redemption after the fifth year, which can be exercised on the date on which interest is payable.