Sovereign Gold Bond scheme 2023-24 ends today: 10 reasons to invest
Sovereign Gold Bond price September 2023: The current series of the gold bonds comes at Rs 5,923 per unit. Additionally, a discount of Rs 50 per unit is available to investors applying online and making the payment digitally. After the discount, a price of Rs 5,923 per unit is applicable to eligible investors. SGBs offer a wide range of benefits for investors.
Sovereign Gold Bond Scheme 2023, Sovereign Gold Bond price September 2023: Want to buy Sovereign gold bonds (SGBs)? SGBs are available in the market once again. The subscription window for the Sovereign Gold Bond (SGB) Scheme 2023-24 Series II opened on Monday, September 11, and will remain open till Friday, September 15. Under the gold bonds scheme, wherein one unit is equivalent to the value of one gram of the precious metal, the Reserve Bank of India (RBI) issues the bonds on behalf of Government of India.
The current series of the gold bonds comes at Rs 5,923 per unit. Additionally, a discount of Rs 50 per unit is available to investors applying online and making the payment digitally. After the discount, a price of Rs 5,923 per unit is applicable to eligible investors. SGBs offer a wide range of benefits for investors.
Here is a list of 10 reasons for investors to park their funds in the Sovereign Gold Bond (SGB) scheme:
1. Free from impurities
SGB bonds represent the value of gold in 99.9 per cent purity. Therefore, these bonds make an excellent alternative to physical gold with no impurity.
2. Interest rate
Through gold bonds, not only does the investor get the gold price-linked return, but also gets an additional discount. The interest rate is fixed at 2.5 per cent per annum on the amount invested till maturity. The interest is credited semi-annually into the investor’s bank account. The amount is taxable under the Income Tax Act, 1961.
3. No capital gains tax
The default maturity period of SGCs is eight years; however, the government allows investors to exit after the first five years under certain conditions. SGBs are exempted from capital gains tax at the time of maturity. The tax is applicable only in case the investor exercises the premature withdrawal option.
4. No making charges
One does not need to pay any making charges in SGBs. One only pays for the yellow metal.
5. No GST or STT
There is no security transaction tax or GST imposed on trades in SGBs. This is in contrast to dealing in physical gold, wherein buyers have to bear GST.
6. Collateral for loans
SGBs are eligible to be used as collateral for loans. The loan-to-value ratio is the same as applicable to ordinary gold loans prescribed by the RBI from time to time. However, one needs to note that sanctioning loans against SGBs is subject to the decision of the financial institutions and cannot be inferred as a matter of right.
7. Tradable on exchanges
SGBs are tradable on the bourses as well. SGBs can also be transferred to any other eligible investor.
8. Maturity return
The quantity of gold for which the investor pays is protected in SGBs since they receive the ongoing market price at the time of redemption. For instance, if one buys one unit (one gram of gold) at Rs 5,000 and the market price of gold rises to 8,000 per gram at the time of maturity, the investor will get the prevailing market price.
9. DEMAT form
Investors can hold SGBs in demat form, which provides added security in comparison to physical gold.
10. No default risk
SGBs come with a guarantee. Hence, there is no risk of default.
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