Sovereign Gold Bonds Latest News: Should you buy to make profit? Get maximum benefit, expert explains strategy

Sovereign Gold Bonds Latest News Today: The Sovereign Gold Bond 2020-21 series IX is available for subscription from Monday. Sovereign Gold Bonds price is good, but you must know what to do to get more profit. However, should you buy? According to expert, Sovereign Gold Bond offers a good investment opportunity for investors willing to invest in digital form of Gold. But do you know how you can avail maximum benefits out of Sovereign Gold Bonds investment? Zee Business Expert Jitendra Solanki gives top tips to maximise the gains. 

Expert Jitendra Solanki's tips for Sovereign Gold Bonds investment 

The Sovereign Gold Bonds 2020-21 series IX are now available for subscription from today. The subscription is open till 1 Jan 2021. The issuance date of this Sovereign Gold Bonds tranche will be on 5 January 2020. The government had in October issued a notification with regards to this. The 2020-21 Series VII SGB were open for subscription by the Reserve Bank of India (RBI) on behalf of the Government of India from 12-16 October 2020.  The next tranche was opened between 9 and 13 November 2020. 

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Sovereign Gold Bonds: How to get maximum benefit

Importantly, Solanki said that Sovereign Gold Bonds are a good investment option for all those who are willing to invest in Gold. This has a benefit of capital gains income tax exemption if invested for 8 years. While investors have an option to exit after five years, they will not have the benefit of income tax exemption in case they decide to exit in 5 years. 

Sovereign gold bonds issue price

Sovereign gold bonds issue price has been fixed at Rs 5,000 per gram of gold, the Reserve Bank of India. The Sovereign Gold Bond Scheme 2020-21 - Series IX will be open for subscription from December 28, 2020 to January 1, 2021. "The nominal value of the bond...Works out to Rs 5,000 per gram of gold," the RBI said.

Sovereign Gold Bonds Redemption: When should you redeem?

Jitendra Solanki says that Sovereign Gold Bonds investors should keep an 8-year horizon while investing. Solanki has revealed that Sovereign Gold Bonds premature REDEMPTION is a strict No-No.  

Sovereign Gold Bonds: What to keep in Mind? 

The expert said that Sovereign Gold Bonds investors should know why they are thinking of investing. Also, entry point in Sovereign Gold Bonds is crucial. Over the last 8-10 years the prices have appreciated. 

Sovereign 

Investors should buy only that much gold via Sovereign Gold Bonds, which does not disturb the balance of the portfolio. A 5-10 per cent allocation in Gold is considered good, he said. 

Though they are slightly at a higher price than the SGBs issues probable a year an half back, he further said.   

Here is the List of SGB issuance dates for remaining  tranches:  

SNo Tranche                    Subscription Date    Issuance date  

1.  2020-21 Series IX           28 Dec-1 Jan           5 Jan 2021  

2.  2020-21 Series X            11-15 Jan                19 Jan 2021  

3.  2020-21 Series XI           1-5 Feb                    9 Feb 2021  

4.  2020-21 Series XII          1-5 Mar                   9 Mar 2021     

Sovereign Gold Bonds are government securities denominated in grams of gold and 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 the Reserve Bank on behalf of Government of India.  

Sovereign Gold Bonds price 

The payment for the Sovereign Gold Bonds will be through cash payment (up to a maximum of Rs 20,000) or demand draft or cheque or electronic banking. The Sovereign Gold Bonds issue price of the Gold Bonds will be Rs 50 per gram less for those who subscribe online and pay through digital mode.  

The Bonds will be denominated in multiples of gram(s) of gold with a basic unit of 1 gram. The tenor of the Bond will be for a period of 8 years with exit option after 5th year to be exercised on the interest payment dates.  

SGB are restricted for sale to resident individuals, HUFs, Trusts, Universities and Charitable Institutions. The minimum permissible investment is 1 gram of gold while the maximum limit for subscription is 4 kg for individual, 4 kg for HUF and 20 Kg for trusts and similar entities per fiscal (April-March) notified by the Government from time to time.