New Delhi: Investors looking to capitalize on the benefits of sovereign gold bonds (SGB) will have the opportunity to subscribe to the latest tranche, Series IV 2023-24, starting February 12. The subscription window will remain open for five days and will end on February 16. , with the broadcast scheduled for February 21, 2024.
Sovereign gold bonds, introduced by the Indian government in 2015, offer investors a unique way to invest in gold. (Also Read: EPFO increases interest rate for FY 2023-24; now subscribers get THIS return)
Recognized as shares of the Government of India under the Government Securities Act, 2006, these bonds offer a concessional annual interest rate of 2.5 per cent, credited semi-annually to investors’ accounts, with final payment of interest at maturity . (Also Read: Latest SBI FD Rates 2024: How Much Return Will You Get From Fixed Deposit? Check Here)
Investment details and advantages
SGBs are denominated in grams of gold, with a minimum investment requirement of one gram and a maximum subscription limit of 4kg. Investors have the option of making a premature repayment after the fifth year, coinciding with the interest payment date.
Importantly, upon maturity, these bonds do not incur taxes on redemption, making them an attractive option for long-term investors.
Interested investors can purchase SGB through various channels including scheduled commercial banks, designated post offices and stock exchanges.
The valuation of SGBs is determined based on the average closing price of gold with a purity of 999 during the three business days preceding the subscription period. Online subscriptions with digital payments also enjoy a discount of Rs 50 per gram.
Past performance of SGBs indicates promising returns: the first series issued in 2015 matures at the end of 2023, yielding annual returns of 12.9 percent.
In comparison, the yellow metal earned an average return of 11.2 percent over the past 20 years. SGBs issued on February 8, 2016 (SGB 2016-I) will expire on February 8, 2024.