Sovereign Gold Bond 2023–24: Series III tranche to open December 18, issue price set at Rs 6,199 — Here's how you can get a discount

Sovereign Gold Bond 2023–24: The 2023–24 Series III tranche of the sovereign gold bonds (SGBs) will be open for subscription between December 18 and 22, and the settlement date will be December 28, 2023, a finance ministry statement said on Friday (December 15). The Series IV of sovereign gold bonds is scheduled for February 12–16, 2024.

A PIB release confirmed, "The issue price of the Bond during the subscription period shall be Rs 6,199 (Rupees Six Thousand One Hundred Ninety Nine only) per gram, as also published by RBI in their Press Release dated December 15, 2023."   
 

Sovereign Gold Bonds: How to get a discount while buying SGBs?

The release further added that the Government of India, in consultation with the Reserve Bank of India, has decided to allow discount of Rs 50 (Rupees fifty only) per gram from the issue price to those investors who apply online and the payment is made through digital mode. 

For such investors the issue price of Gold Bond will be Rs 6,149 (Rupees Six Thousand One Hundred Forty Nine only) per gram of gold, the statement added.

Earlier, the ministry had announced that the price of SGB will be fixed in Indian rupees based on a simple average closing price of gold of 999 purity, published by the India Bullion and Jewellers Association Limited (IBJA) for the last three working days of the week preceding the subscription period." 
 

What are sovereign gold bonds?

Sovereign Gold Bonds (SGBs) are a financial instrument issued by the Reserve Bank of India (RBI) on behalf of the Government of India. These bonds are a way for individuals to invest in gold without actually owning physical gold. Here are some key features and benefits of Sovereign Gold Bonds:

Sovereign gold bonds: Features

Government-backed Security: SGBs are issued by the Government of India, making them a safe and secure investment.

Denomination: Investors can buy SGBs in denominations as low as one gram of gold, making it accessible to a wide range of investors.

Interest Income: SGBs offer an additional benefit in the form of fixed interest, which is paid semi-annually. The rate is fixed at the time of issuance.

Capital Gains Tax Exemption: Capital gains arising from the transfer of SGBs are exempt from capital gains tax if the bonds are held until maturity.

Tradability: SGBs are listed on stock exchanges, providing liquidity to investors who want to sell before maturity.

Maturity Period: The maturity period of SGBs is typically 8 years, with an option to exit from the 5th year onward on interest payment dates.

Redemption: SGBs can be redeemed at the prevailing market price on the stock exchanges if the investor chooses to exit before maturity.

Sovereign gold bonds: Benefits

No Storage Hassle: Unlike physical gold, SGBs eliminate the need for safe storage and insurance of gold.

Interest Earnings: SGBs provide a fixed rate of interest, allowing investors to earn income in addition to the potential appreciation in the gold price.

Tax Efficiency: Capital gains tax exemption on maturity provides tax benefits to investors.

Gold Price Movement: Investors benefit from any increase in the price of gold, as the redemption value is linked to the prevailing market price.

Risk Mitigation: As a government-backed instrument, SGBs carry lower counterparty risk compared to some other forms of gold investment.

Liquidity: SGBs can be sold on stock exchanges, providing liquidity to investors who may need to liquidate their investment before maturity.

Diversification: SGBs offer an opportunity for investors to diversify their portfolio by including an asset class like gold.

Sovereign Gold Bond Scheme 2023-24 (Series III) will be opened for subscription during the period December 18-22, 2023

The Government of India in consultation with the Reserve Bank of India has decided to allow discount of ₹50 (Rupees Fifty only) per gram from the issue price…

— PIB India (@PIB_India) December 15, 2023