Sovereign Gold Bond Subscription Window Closes In 1 Day. Should You Invest?

Sovereign Gold Bond Scheme: Subscription for the fourth tranche ends on Friday, July 10

Sovereign Gold Bond Scheme: Subscription of government-run Sovereign Gold Bonds in the current tranche ends on Friday, July 10. Once the subscription window closes, gold bonds will be issued to eligible applicants on July 14. Series IV of the government-run gold bond scheme opened for subscription on Monday. The Sovereign Gold Bond scheme enables the public to park funds in non-physical gold and earn interest on their investments. Once the fourth tranche closes for subscription, the Sovereign Gold Bonds will be available for five days each next month and in September.

Here are important features of the Sovereign Gold Bond scheme:

Sovereign Gold Bonds: Important Dates


Subscription Dates

Date of Issuance

2020-21 Series V

August 3-7, 2020

August 11, 2020

2020-21 Series VI

August 31-September 4, 2020

September 8, 2020

(Source: Ministry of Finance)

(The first instalment of the Sovereign Gold Bond scheme for financial year 2020-21 was launched in April)

Gold Bond Key Features: Issue/Redemption Price, Discount, Tax

A price of Rs 4,852 per gram has been set for Series IV Sovereign Gold Bonds. The price for online purchasers is Rs 4,802 per gram, after a discount of Rs 50 per gram. The discount is aimed at promoting the use of digital payments. Investment in the gold bonds leads to interest income at a fixed rate of 2.50 per cent per annum, payable semi-annually. Interest is taxable. However, individual investors are exempt from paying tax on the capital gains arising out of redemption.

(Also Read: Should You Buy Gold Bonds When Gold Is Near Record High? | How To Buy Sovereign Gold Bonds)

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Investment in the Sovereign Gold Bond scheme is locked for a period of eight years. However, an exit option is available after the first five years.

How To Invest In Sovereign Gold Bonds

(Also Read: Which Route Is Best To Invest In Non-Physical Gold?)

Investors can park their funds in the gold bonds through nationalised and private banks, designated post office branches, stock exchanges BSE and NSE, and the Stock Holding Corporation.

The government’s Sovereign Gold Bond programme – in which the RBI issues gold bonds on behalf of Government of India – was launched along with the Gold Monetisation Scheme in November 2015, and is aimed at bringing down the country’s reliance on gold imports to meet its demand and to ease the demand for physical gold. 

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