Sovereign Gold Bond Scheme opens today; here's all you need to know about price, discounts and where to buy

The Series VIII of Central Government’s Sovereign Gold Bond Scheme 2021-22 is set to open today, 29 November. The five-day window to buy digital gold will close on 3 December.

As per the notification by the Finance Ministry, the issue price of the scheme for the eighth tranche has been fixed at Rs 4,791 for one gram.

What is Sovereign Gold Bonds Scheme?

This scheme was launched in 2015 with an intention of reducing the demand for physical gold and shifting a part of domestic savings (used for buying gold) into financial savings.

Alluring right? Here’s how you can buy these Gold Bonds:

These bonds can be bought through stock Holding Corporation of India Limited (SHCIL), banks, Bombay Stock Exchange Limited (BSE), and the National Stock Exchange of India Limited (NSE). Digital mode is also available for the buyers. People can apply for gold bonds digitally via the websites of the listed scheduled commercial banks. While buying these bonds, the maximum limit of cash payment by an individual is 20,000. People can also choose to pay through cheque, demand draft, or electronic banking. The KYC process will be same as that while buying physical gold.

What is the tenure of gold bonds?

These bonds have a tenure of eight years. The gold bonds also have an exit option after the completion of the fifth year (to be exercised on the next interest payment date). The investors of these gold bonds will be paid at a fixed rate of 2.50 percent per annum which will be payable semi-annually on the nominal value. The minimum permissible investment is one gram of gold. As per Hindustan Times, the maximum subscription limit is 4 kilos for individuals as well as the Hindu Undivided Familu (HUF) and 20 kilos for entities such as trusts every fiscal year from April to March.

Discounts: The Government of India, in consultation with the RBI, has allowed a discount of Rs 50 per gram from the issue price to investors. The discount is allowed for those investors who apply online and make payments through digital mode. After the discount, the issue price of gold bonds will be Rs 4,741 per gram of gold.

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