Gold Bond Scheme 2021-22 OPEN NOW for subscription: Know WHY you should INVEST

The first tranche of the Sovereign Gold Bond (SGB) scheme for 2021-22 has opened for subscription on Monday, May 17. The issue will close on May 21 and the bonds will be issued on May 25, according to the Reserve Bank of India (RBI).

An issue price of Rs 4,777 per gram has been fixed for the gold bonds. However, investors who will be applying and making payment online will get a discount of Rs 50 per gram.

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As per the finance ministry that gold bonds will be issued in six tranches from May 2021 to September 2021.

The bonds are issued by RBI on behalf of the central government and were first launched in November 2015 in a move to reduce the demand for the purchase of gold (in the form of jewellery, gold bars etc) and shift that part of domestic savings into financial savings.

Gold bonds are for a period of 8 years with an exit option after the fifth year, which is exercised on the next interest payment dates.

Why should you invest?

As per a report by india.com, experts believe that buying gold bonds is a more effective way to invest in gold, rather than buying physical gold if a buyer holds on till maturity. Also, there is nothing to worry about the storage if held in Demat form.

Gold bond investors also enjoy the exclusive benefit of no additional GST, unlike in physical gold because of which if there are any capital gains at maturity, it is completely tax-free.

The minimum permissible investment in sovereign gold bonds is 1 gram of gold.

How are gold bonds sold?

All banks except small finance banks and payment banks sell gold bonds. Bonds are also sold by the Stock Holding Corporation of India Limited (SHCIL), a few designated post offices, the National Stock Exchange (NSE) and BSE.