RBI announces dates for issuance of sovereign Gold bonds
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There bonds will be issued in six tranches, beginning 28 April and ending 08 September 2020. The RBI will come out with an issue every month. Please see the calendar below for exact dates.
Investors can buy these bonds through designated scheduled commercial banks (except Small Finance Banks and Payment Banks), Stock Holding Corporation of India Limited, and designated post offices. One can also buy these bonds through National Stock Exchange of India Limited and BSE Limited.
Sovereign gold bonds have a tenure of eight years, with exit options are available from the fifth year.
The minimum permissible investment unit is 1 gram of gold and the maximum limit of subscription is 4 kg for individuals, 4 kg for the Hindu Undivided Family, and 20 kg for trusts and similar entities per fiscal.
Sovereign gold bonds are issued by the RBI on behalf of the government. Apart from the rise in gold prices, the investor gets a fixed rate of interest on the investment amount throughout the tenure of the fund. The government will pay an interest at the rate of 2.5% per annum. The interest is payable semi-annually.
Gold has emerged as one of the best performing asset class this year, given the rising uncertainty over the coronavirus pandemic, people are rushing towards investing in gold as it is considered a safe haven asset. For investors it is advisable to invest in gold for portfolio diversification. “Investment up to 10 per cent of the portfolio in gold provides the necessary balance required for most individuals," said Arnav Pandya, founder, Moneyeduschool, a financial literacy initiative.
Sovereign gold bonds are considered one of the better ways of investing in gold as along with capital appreciation an investor gets a fixed rate of interest. Apart from this, it is tax efficient as no capital gains is charged in case of redemption on maturity. However, it is a good option only if one wants to invest in it for long-term as exiting before maturity could be difficult.
“Sovereign gold bonds are a good way to ensure an investment that does not need physical storage of gold. But one has to keep in mind that this is a long term investment unlike physical gold which can be sold immediately," said Shweta Jain, founder, Investography.
Sovereign gold bonds are listed on exchange but the trading volumes are not high therefore, it will be difficult to exit before maturity.
Calendar for sovereign gold bond issuance:
Tranche Date of Subscription Date of Issuance
2020-21 Series I April 20-24, 2020 28-Apr-20
2 2020-21 Series II May 11-15, 2020 19-May-20
3 2020-21 Series III June 08-12, 2020 16-Jun-20
4 2020-21 Series IV July 06-10, 2020 14-Jul-20
5 2020-21 Series V August 03-07, 2020 11-Aug-20
6 2020-21 Series VI August 31-Sept 04, 2020 8-Sep-20
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