Sovereign Gold Bond Series-II of 2021-22 Opens on 24th May
Sovereign Gold Bond Scheme Series-II (Tranche II) of 2021-22 would open for subscription on May 24, 2021. Sovereign Gold Bonds (SGB) 2021-22 Price is based on the average price of the preceding 3 days of the issue opening date which is fixed by Govt of India. These gold bonds offer Rs 50 per gram as discount to investors who invest online in demat form. In the article, we would provide Sovereign Gold Bond Scheme 2021-22 Series-II issue price and details.
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Sovereign Gold Bond 2021-21 Series II – Issue Price, Dates and Details
SGB Series-II of 2021-22 would open for subscription on Monday, May 24, 2021 and closes by Friday, May 28, 2021.
The issue price is fixed at Rs 4,842 per gram. Investors who are investing through online/demat form would get a discount of Rs 50 per gram. Means this would be available for Rs 4,792 post discount. This price is Rs 65 higher than the SGB’s issued last week in Series-I.
These bonds are issued by RBI on behalf of the Government of India, hence are considered as one of the safest investment options.
The settlement date for Series-2 of these gold bonds is 1 June 2021. Means, these gold bond units would be issued to investors on 1 June 2021 after subscription is closed.
These bonds would carry 2.5% interest rate per annum, which is payable every half year.
The sovereign gold bond scheme has a tenure of 8 years. However, one can exit from these bonds after 5 years on subscription dates.
These Sovereign Gold Bonds are issued in denominations of 1 gram of gold and in multiples of 1 gram.
Minimum investment is equivalent to 1 gram of gold.
The maximum amount of subscription is, 4 kg for individuals, 4 kg for HUF and 20 Kg for trusts and similar entities per financial year (April-March).
How to apply for Sovereign Gold Bonds issue?
The gold bonds will be sold through all banks (except Small Finance Banks and Payment Banks), Stock Holding Corporation of India Limited (SHCIL), designated post offices, and recognized stock exchanges i.e., NSE/BSE.
I would recommend you buy through demat form so that everything is online, and you also get a Rs 50 discount per gram.
Should you pay tax on Sovereign Gold Bonds?
One need to check tax aspects, both from capital gains as well as from interest received. You can check this article which provides complete insights into tax on sovereign gold bonds.
Who can invest in these Sovereign Gold Bonds?
If you fall under any of the below categories of investors, you can invest in these gold bonds.
1) Investors who want to diversify portfolio between equity, debt and gold can invest in Sovereign Gold Bonds. Alternatively, one can look at investing in gold mutual funds.
2) Investors who want to accumulate gold for future purpose (gift ornaments to a spouse or daughter) can invest in sovereign gold bond scheme.
You would have seen that gold prices have fallen in the recent past and bounced back now. Gold might provide stable returns in the medium to long term.
Can I buy Sovereign Gold bonds in the secondary market?
Its indeed a best option. One can check our article earlier about some of the best sovereign gold bonds from the secondary market.
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Thanks for the informative posts. With regard to SGBs – isn’t it true that redemption of the bond will happen at the prevailing market rates? Hypothetically, if gold prices are the same on the date of issue & redemption or if the redemption price is lower than issue price, it could result in nil capital gain or lead to a loss in the respective cases. Is this understanding correct? If yes, doesn’t subscribing at high gold prices increase the risk significantly? Thanks for your advice.
Thats correct. If the price of gold has not appreciated, then you would not get anything. But this is true even if you buy gold ETFs or physical gold right? You would get extra 2.5% interest per year beyond the value of gold price as on the date of redemption. The idea of investing in gold a) price appreciation anticipated and this is used as diversification purpose as you are pure investor b) you invest to utilize in future and you lock the money today itself.
Hi Sir, Thanks for keeping us updated on the different financial instruments. I am a big fan of your work and dedication.
I’ve got a suggestion, can you please prepare an article for “Invoice discounting”? Is it worth investing for a retail investor? Risk factor? and covering other important points.
I’ve seen platform like “kredx” and “TradeCred” giving options for retail investor for Invoice discounting.
Your valuable thoughts are much appreciable.
Thanks in advance
Sure Jainil. Let me work on this in coming weeks