Investments in SGBs earn an annual interest of 2.50%.
Sovereign Gold Bond Scheme: The government is once again allowing investing in Sovereign Gold Bond (SGB). The next series of the Sovereign Gold Bond Scheme will open on Monday, 18 December up till 22 December. This time the government has fixed the price of Sovereign Gold Bond at Rs 6,199 per gram.
You will get a discount of Rs 50 per gram on applying online and making digital payments. That means you will have to pay Rs 6,149 for 1 gram of gold.
Here is how you can earn profits by investing in Sovereign Gold Bond:
What Is Sovereign Gold Bond?
A Sovereign Gold Bond is a government bond. It can be converted into demat. This bond is of 1 gram of gold, that is, the price of the bond will be the same as the price of 1 gram of gold. It is issued by the Reserve Bank Of India (RBI). You will get a discount of Rs 50 per gram on applying online and making digital payments.
Investment In 24 Carat, i.e. 99.9% Pure Gold
In Sovereign Gold Bond you invest in 24 carats, i.e. 99.9% pure gold. Investments in SGBs earn an annual interest of 2.50%. If money is needed, a loan can also be taken against the bond.
The price of the bond is decided based on the published rate of Indian Bullion and Jewelers Association Limited, i.e. IBJA. In this, the average of the rates of the last three days of the week preceding the subscription period is calculated.
Purity And Safety
There is no need to worry about accuracy in SGBs. According to the National Stock Exchange (NSE), the price of gold bonds is linked to the price of gold of 24-carat purity published by the Indian Bullion and Jewelers Association (IBJA). Along with this, it can be kept in the form of demat, which is quite safe and there is no expense for it.
Investment In Maximum 4 Kg Of Gold
Through SGBs, a person can invest a minimum of 1 gram and a maximum of 4 kilograms of gold in a financial year. In the case of joint holding, the investment limit of 4 kg will apply to the first applicant only. Whereas the maximum limit of purchase for any trust is 20 kg.
Tax To Be Paid On Selling Bonds Before 8 Years
The maturity period of Sovereign is 8 years. After the completion of the maturity period, there is no tax on the profits made from it. Whereas if you withdraw your money after 5 years, then the profit arising from it is taxed at 20.80% in the form of Long Term Capital Gain (LTCG).
128% Return To Investors
The first series of Sovereign Gold Bond matured on 30 November. These bonds were issued on November 26, 2015, at an issue price of Rs 2,684 per gram. The holder redeemed it at Rs 6,132 per unit. Accordingly, the total return given in the last 8 years was 128.5%.
For instance, if an investor had invested Rs 1 lakh in gold bonds in November 2015, they would have received around Rs 2.28 lakh on November 30. That means an earning of about Rs 1.28 lakh on this investment in 8 years.
Next Installment In February 2024
After the first installment that opens on 18 December, the second installment will most probably open on 12-16 February 2024 as per the reports. However, any information at what rate these will be issued has not been available yet.
The Sovereign Gold Bond Scheme was launched by the government in November 2015 under Gold Monetisation Scheme.