The government has announced two more tranches of sovereign gold bonds (SGBs) as part of the Sovereign Gold Bond Scheme 2023-24. The SGBs are an attractive investment option for investors who want to diversify their portfolio and hedge against inflation. The SGBs offer a fixed interest rate of 2.5% per annum on the face value of the bonds, along with the benefit of capital appreciation linked to the market price of gold. The SGBs are also exempt from capital gains tax if held till maturity.
The details of the two tranches are as follows:
- SGB 2023-24 Series III: Open for subscription from December 18 to December 22, 2023. Issue and allotment date: December 28, 2023.
- SGB 2023-24 Series IV: Open for subscription from February 12 to February 16, 2024. Issue and allotment date: February 21, 2024.
The issue price of the SGBs will be based on the average closing price of 24-carat gold in the previous week, as published by the India Bullion and Jewellers Association (IBJA). The government will offer a discount of Rs.50 per gram for online applications. The minimum investment is one gram and the maximum is four kilograms for individuals and HUFs, and 20 kilograms for trusts and institutions.
The SGBs can be purchased through designated banks, post offices, stock exchanges, SHCIL, CCIL and online platforms. The SGBs can be held in physical or dematerialized form and are transferable and tradable in the secondary market. The SGBs have a tenure of eight years, with an exit option after five years on interest payment dates.
The SGBs are backed by the government’s guarantee on both interest and principal payments. The SGBs also offer protection from currency fluctuations and geopolitical risks that may affect the price of gold.