Sovereign Gold Bond: Scheme 2023-24 opens next week. Should you apply?

The price for I-League 2023-24 has been set at ₹5,926/gm. Investment in Sovereign Gold Bonds has helped the RBI to step up ₹30,000 cr since its inception in November 2015, said Nish Bhatt, Founder & CEO, Millwood Kane International.

The opening of the Sovereign Gold Bond scheme for subscription by retail investors offers a unique opportunity to invest in gold as an asset class. With the option to buy as little as one gram of gold and a maximum of four kilograms, investors can participate in this regulated and secured investment avenue. “The dematerialized form of the bonds allows for convenient holding in a displacement account, eliminating concerns about impurities and deductions often associated with physical gold. The securitization of these bonds against 99.9% pure gold held by the Reserve Bank of India ensures that investors will receive the full value of the gold upon redemption in the eighth year, without any deductions,” said Abhijit Roy, CEO, GoldenPi.

Should you invest?

Investing in paper, digital gold provides high liquidity, eliminates storage costs, and is easier to sell than physical gold. The attractive offer extends further, with retail investors able to receive an annual interest of 2.5% on their investment until the maturity of the bonds. In addition, there is a discount of ₹50 on every gram of gold applied by an applicant through the online mode and pays digitally (Network Banking, NEFT, UPI etc.). “Investment in SGBs comes with an interest coupon payable semi-annually. “SGB has posted double-digit gains since its inception in 2015,” said Nish Bhatt.

Benefits of SGB

The liquidity of these bonds is facilitated by their listing on exchanges, allowing investors to redeem them from the fifth year onwards. One of the most significant advantages of this asset class is the complete exemption from taxation on capital gains realized after eight years of maturity.

Should retail investors go for SGB?

According to Abhijit Roy, CEO, GoldenPi, this scheme offers retail investors a secure, interest-bearing investment in gold, allowing them to diversify their portfolios and tap into the long-term potential of this precious metal. With easy access, assurance of purity, interest earnings, and tax benefits, the Sovereign Gold Bonds scheme offers an attractive opportunity for investors looking to tap into gold’s potential as a long-term investment.

Where can investors buy SGB?

– Scheduled Commercial Banks (other than Small Finance Banks, Payments Banks, and Rural Regional Banks), Stock Holding Corporation of India Limited (SHCIL),

-Clearing Corporation of India Limited (CCIL),

—Designated post offices (as notified) and

-Identified stock exchanges directly or through agents.

Updated: 17 June 2023, 01:49 PM IST