Sovereign Gold Bond tranche 8 closes for subscription today: 5 things investors should know

Sovereign Gold Bond Scheme 2021-22 series VIII Subscription: The Sovereign Gold Bond Scheme 2021-22 series VIII will close for subscription on Friday, December 3, 2021. It has opened on November 29, 2021.

See Zee Business Live TV Streaming Below:

SGBs are government securities denominated in grams of gold. They are substitutes for holding physical gold. Investors have to pay the issue price in cash and the bonds will be redeemed in cash on maturity. The Bond is issued by Reserve Bank on behalf of Government of India.

The investors who are interested in SGB should know these important points:

1) The Reserve Bank of India (RBI) informed that the issue price for Sovereign Gold Bond Scheme 2021-22 has been fixed at Rs 4,791 per gram of gold.

2) It has to be noted that the RBI in consultation with the government has decided to offer a discount of Rs 50 per gram less than the nominal value to those investors applying online and the payment against the application is made through digital mode.

3) The people residing in India who are defined under Foreign Exchange Management Act, 1999 are eligible to invest in SGB. The eligible investors include individuals, HUFs, trusts, universities and charitable institutions. The individual investors with subsequent change in residential status from resident to non-resident may continue to hold SGB till early redemption/maturity.

4) The quantity of gold for which the investor pays is protected, since he receives the ongoing market price at the time of redemption/ premature redemption. The SGB offers a superior alternative to holding gold in physical form. The risks and costs of storage are eliminated. Investors are assured of the market value of gold at the time of maturity and periodical interest. SGB is free from issues like making charges and purity in the case of gold in jewellery form. The bonds are held in the books of the RBI or in demat form eliminating risk of loss of scrip etc.

5) The Bonds bear interest at the rate of 2.50 per cent (fixed rate) per annum on the amount of initial investment. Interest will be credited semi-annually to the bank account of the investor and the last interest will be payable on maturity along with the principal.

The scheme was launched in November 2015 with an objective to reduce the demand for physical gold and shift a part of the domestic savings - used for the purchase of gold - into financial savings.