Sovereign Gold Bonds Latest News: Subscription starts today; OPTIMISE your gains this way!

Here is amazing opportunity to invest in gold for everyone! The tenth tranche of the Sovereign Gold Bonds (SGB) are available for subscription from today (11 January). The subscription is open till 15 January 2021. But do you know how you can avail maximum benefits out of this investment? Expert Jitendra Solanki gives these insightful tips to maximise returns on SGBs. 

The issue price for this series of SGBs has been fixed at Rs 5,104 per gram of gold.  

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Expert Jitendra Solanki’s top tips for SGB investment  

Solanki said that SGBs are surely a good investment option for all those who are willing to invest in Gold. He said that one gets higher rate of interest above what capital appreciation one will get from gold. The SGBs currently offer 2.5 per cent interest per annum which is credited semi annually in the accounts of the holder.   

This instrument has a benefit of capital gains tax exemption if invested for 8 years. While the investors have an option to exit after five years, they will not have the benefit of tax exemption in case if the decide to exit in 5 years. A 8-year horizon should be taken while investing in SGBs. He says a strict NO for premature REDEMPTION.   

 What to keep in Mind?  

 The expert said that investors should know why they are a thing to invest and know that entry point is crucial. Over the last 8-10 years the prices have appreciated. Investors should buy only that much which does not disturb the balance of the portfolio. A 5-10 per cent allocation in Gold is considered good, he said.  

 They are slightly at a higher price than the SGBs issued a year and a half back, he further said. The SGBs were issued even at a price of around Rs 4,000.     

There is also additional interest     

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

SNo Tranche                    Subscription Date    Issuance date   

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

2.  2020-21 Series XII          1-5 Mar                   9 Mar 2021      

SGBs 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.   

The payment for the Bonds will be through cash payment (up to a maximum of Rs 20,000) or demand draft or cheque or electronic banking. The 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.