Gold Bond Scheme May 2021: The first tranche of Sovereign Gold Bond Scheme 2021-22 or the first series of gold bonds this fiscal year is now open for subscription. The issue was opened this morning and will close on May 21. The finance ministry announced that gold bonds will be issued in six tranches from May 2021 to September 2021. The issue price for gold bond has been fixed at ₹4,777 per gram while investors applying and making payment online will get a discount of ₹50 per gram.
Why should one invest in gold bonds?
Experts believe that buying gold bonds is a more effective way to invest in gold, rather than buying physical gold, if a buyer holds on till maturity. Gold funds (ETFs) are more liquid compared to sovereign gold bonds which offer an annual interest rate of 2.50 per cent.
Those investing in gold bonds also do not have to worry about the storage if held in Demat form.
Investors of gold bonds also have the exclusive benefit of no additional GST, unlike in physical gold. As a result, capital gains at maturity, if any, is completely tax-free.
All you need to know about the government-run Sovereign Gold Bond Scheme 2021-22:
- The Reserve Bank of India (RBI) issues the bonds on behalf of the central government.
- The gold bond scheme was first launched in November 2015 in a move to reduce the demand for the purchase of gold (in the form of jewellery, gold bars etc) and shift that part of domestic savings into financial savings.
- The issue date of the latest tranche of gold bonds will be May 25.
- The tenor of gold bonds is 8 years with an exit option after the fifth year, which is exercised on the next interest payment dates.
- The bonds are sold through all banks (except Small Finance Banks and Payment Banks), Stock Holding Corporation of India Limited (SHCIL), a few designated post offices, as well as stock exchanges like the National Stock Exchange of India Limited (NSE) and Bombay Stock Exchange Limited (BSE).
- “The nominal value of the bond 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,” the RBI said citing the publication by the India Bullion and Jewellers Association Limited.
- The minimum permissible investment in sovereign gold bonds is 1 gram of gold.
- Meanwhile, gold futures on MCX crossed the key ₹48,000 level per 10 gram today. In global markets, gold rates hit a 3-month high in light of a weaker US dollar and a dip in Treasury yields. Spot gold was also up 0.6% at $1,852.39 per ounce.
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