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Introduction
As per the recent announcement by the Reserve Bank of India (RBI), the Sovereign Gold Bond (SGB) scheme will be open for subscription from June 19th to June 23rd, 2023. This scheme allows investors to invest in gold without actually buying physical gold, which makes it an attractive investment option.
Details of the Sovereign Gold Bond Scheme
The SGB scheme is issued by the RBI on behalf of the Government of India. The bonds are denominated in grams of gold, and the price of one gram of gold is fixed by the government based on the prevailing market rates at the time of issuance. Investors can purchase these bonds from authorised banks and financial institutions or through the stock exchanges. The minimum investment in SGBs is one gram of gold, and the maximum is 4 kilograms for individuals and HUFs (Hindu Undivided Families) and 20 kilograms for trusts and other eligible entities.
SGB (Sovereign Gold Bonds) June 2023 Dates
What dates will the Sovereign Gold Bonds be available for application in June 2023?
The Sovereign Gold Bond Scheme 2023-24 – Series 01 (June 2023 SGB series) will be open for subscription from June 19, 2023 (Monday) to June 23, 2023 (Friday).
The detailed information on the Issue Details are as follows:
Issue Details of SGB June 2023 i.e. 2023-24 Series I Tranche
| Issue Name | Sovereign Gold Bonds Scheme 2023-24 – Series 1 (Series I) |
| Security Symbol | SGB232401 |
| ISIN | INxxxxxxxx |
| Issue Period | June 19, 2023 to June 23, 2023 |
| Issue Price (per gram of gold) | Online Mode: ₹5,876 per gram | Offline Mode: ₹ 5,926 per gram |
| Minimum Quantity (in grams) | 1 gram |
| Maximum Quantity (in grams) | For Individuals and HUF: 4000g (4kg). For Trusts, and similar entities: 20,000g (20kg) |
| Bid Quantity Multiples | You may apply in multiples of 01 gram, until the specified maximum quantities. |
| Rate of Interest | The Government of India has indicated that an interest of 2.50% per annum on the amount of initial investment will be paid to investor. The interest accrual shall commence from the date of issue, and is paid out every 6 months. |
| Date of Allotment | June 27, 2023 (Tuesday) |
| Date of Listing | TBC |
Interest Rates and Tenure
The SGB scheme provides an interest rate of 2.5% per annum, payable semi-annually on the invested amount. This rate is significantly higher than the interest rates offered on other gold investments such as gold ETFs (Exchange-Traded Funds) and physical gold. The tenure of Sovereign Gold Bonds is eight years, with an option to exit after the fifth year. Investors can choose to redeem the bonds at any time after the fifth year, and the redemption price will be based on the prevailing market price of gold at the time of redemption.
Allotment Price
The allotment price of Sovereign Gold Bonds is based on the average closing price of gold of 999 purity of the last three business days of the previous week.
For the June 2023 tranche, the allotment price would be for ₹5,876 per gram (online mode), and ₹5,926 per gram (offline mode).
The allotment of bonds is made on a first-come, first-served basis, subject to the availability of bonds. The bonds are issued in a dematerialised form, which means that investors do not receive any physical certificates for their investment. Instead, they receive an electronic certificate in their demat account.
How to Apply for Sovereign Gold Bonds
Investors can apply for the SGB scheme through their banks or financial institutions. They need to fill in the application form and submit it along with the necessary documents and payment. The payment can be made through cash, cheque, demand draft or online transfer. The banks or financial institutions will then submit the application to the RBI on behalf of the investor. Investors can also apply for SGBs through the stock exchanges if they have a demat account.
Benefits of Investing in Sovereign Gold Bonds
Sovereign Gold Bonds offer several benefits to investors.
- Firstly, they provide an opportunity for investors to invest in gold without actually buying the physical metal. This eliminates the need for storing, insuring, and transporting physical gold, which can be costly and risky.
- Secondly, the interest rate offered by the government is significantly higher than other gold investments, which makes it an attractive investment option.
- Thirdly, the exemption of capital gains tax on maturity provides a tax-efficient way of investing in gold.
- Lastly, Sovereign Gold Bonds can be used as collateral for loans, providing investors with an additional source of funds.
Conclusion
The Sovereign Gold Bond scheme provides an excellent investment opportunity for individuals looking to invest in gold. The interest rate offered by the government, tax benefits, and the option to use the bonds as collateral for loans make them a compelling investment option. The June 2023 subscription window provides an opportunity for investors to invest in these bonds and diversify their portfolio. However, it is essential to consider factors such as market volatility and the prevailing gold prices before investing in SGBs. Overall, Sovereign Gold Bonds are an excellent investment option for individuals looking to invest in gold and diversify their portfolio.
Hopefully, this article helps you with all the details needed to make your investment decision.
Additionally, feel free to check out the 2023 SGB (Sovereign Gold Bonds) Calendar for the details of the other tranches already issued, or planned for 2023.
All the best in your investment journey!
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