SGB Scheme 2021: Now You Can Buy Gold At Rs 4,682 Per Gram. Here Is How

Here's all you need to know about the Sovereign Gold Bonds and the Sovereign Gold Bond Scheme 2021-22.

Representative Photo

Mumbai: The government will launch the Sovereign Gold Bond Scheme 2021-22 - Series VI for subscription from August 30 – September 03, 2021. 

The bond's nominal value based on the simple average closing price for Gold of 999 purity of the last three business days of the week preceding the subscription period works out to Rs 4,732 per gram of Gold. 

However, in consultation with the Reserve Bank of India (RBI), 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. 

For such investors, the issue price of Gold Bond will be Rs 4,682 per gram of Gold. The issue is priced lower than the previous issues of FY2021-22 due to recent gold price corrections.

What is SGB?

Sovereign Gold Bonds are government securities denominated in grams of Gold and issued by the Reserve Bank of India on behalf of the government as a replacement for owning physical Gold.

The bonds are available in one-gram and multiples of one-gram gold denominations. The minimum investment in the bond is one gram, with a maximum subscription limit of four kilograms (Kgs) for individuals, four Kgs for HUFs, and 20 kgs for trusts and similar companies. 

Advantages

On the amount invested, the bonds pay a fixed rate of 2.50% each year in interest. Interest is credited semi-annually to your bank account, with the final interest due along with the principal at maturity. There are no risks of loss, theft, burglary, as in the case of physical Gold. 

According to experts, Gold should be included in an investor's portfolio to give diversification and inflation protection.

Disadvantage

Long-term investors should only purchase these bonds as liquidity is an issue. The bonds have an eight-year term, with early withdrawals permitted after five years.