The RBI has announced the details of Sovereign Gold Scheme Series III of 2023-24. Sovereign gold bonds offer a fixed rate of interest and have a tenure of 8 years. Gold is generally considered for investment purposes, serving both diversification and hedging objectives. The Government of India has announced this scheme to discourage Indians from holding physical gold. Last time these bonds were issued in Dce-2022. This article provides details about Sovereign Gold Bonds 2023-24 Series III, including subscription dates and eligibility criteria for investors.
Sovereign Gold Bonds Series III – 2023-24 – Issue Details
The public issue of SGB Scheme Series III of 2023-24 will be open for subscription from December 18 to December 22, 2023, for a 5-day period. These bonds will be issued on the settlement date, December 28, 2023, with the units credited to your account by this date.
The RBI has fixed the price of this tranche of sovereign gold bonds at Rs 6,199 per gram of gold.
Gold prices have increased by over 10% in the last year. A year ago in December 2022, the issue price of the SGB Scheme 2022-23 Series III was Rs 5,409 by RBI.
These gold bonds offer a Rs 50 per gram discount if investors buy them through digital online mode. The net gold price per unit after the discount would be Rs 6,149 for online/digital mode purchases. The bonds also offer a fixed rate of interest of 2.5% per annum, paid half-yearly.
Investors need to invest a minimum of 1 gram of gold in SGB. The tenure of these gold bonds is 8 years, with an option for premature redemption after 5 years. Investors can sell on stock exchanges before the maturity date, though the unit price might be lower depending on demand from buyers.
There is no capital gains tax on the redemption of sovereign gold bonds at maturity. Additionally, these sovereign gold bonds can be used as collateral for taking loans.
The interest received on these bonds are taxable in the hands of the investors.
How to invest in these bonds?
If you have a demat account, the process is straightforward. Log in to your demat account, visit the gold bond section, select these bonds, and make the payment. The bonds will be credited to your demat account on the settlement date.
If you do not have a demat account, you can follow an offline process. Log in to your bank’s website, go to the gold bond section, and make the purchase. You will receive the gold bond certificate in your registered email.
In the future, if you lose your gold bond certificate, it can be challenging to trace it in offline/physical certificate mode. Therefore, it is advisable to make purchases only through a demat account. This ensures the security of your gold certificate, and the maturity amount will be credited to your demat-linked bank account at the same time.
Who can buy these Sovereign Gold Bonds Series III of 2023-24?
Many investors view gold as a valuable asset for diversification. If you plan to purchase physical gold for gifting after 8+ years and are concerned about gold price appreciation, consider investing in gold bonds now. This allows you to earn a 2.5% interest and benefit from potential gold value appreciation upon maturity.
Investors often see gold as a means of diversification beyond equity and debt investments. These bonds carry no credit risk and are backed by a sovereign guarantee, ensuring both capital security and interest payout.
You can also invest in sovereign gold bonds through the secondary market, where they are trading on NSE at lower prices.
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