We are pleased to inform you about the Sovereign Gold Bonds 2020-21 issuance calendar as decided by Government of India, in consultation with the Reserve Bank of India. Investors can invest in Sovereign Gold Bond 2020-21 in upcoming “2020-21 Series II Tranche” during the period from May 11,2020 to May 15, 2020 as per the eligibility criteria:
|Sr. No.||Tranche||Period of Subscription|
|1||2020-21 Series II||May 11,2020 to May 15, 2020|
Why to invest in Sovereign Gold Bond:
▪ Bond carry sovereign guarantee both on redemption amount and on the interest.
▪ Avoids the hassles of physical delivery. The risk and cost of storage are eliminated.
▪ SGB are also free from issues like making charges and purity in the case of gold in jewellery form.
▪ The bonds are held in the books of the RBI or in demat form eliminating risk of loss of scrip etc.
▪ Available in demat and paper form.
▪ Investors shall earn returns linked to gold prices.
▪ The Bonds bear interest at the rate of 2.50 per cent (fixed rate) per annum on the amount of initial investment. Interest will be credited semi-annually to the bank account of the investor and the last interest will be payable on maturity along with the principal..
▪ Offers liquidity through trading on stock exchanges for early/emergency exit.
▪ Capital gains on redemption of SGB are not taxable to an individual.
Sovereign Gold Bond Features
Eligibility: The Bonds will be restricted for sale to resident individuals, HUFs, Trusts, Universities and Charitable Institutions.
Denomination: The Bonds will be denominated in multiples of gram(s) of gold with a basic unit of 1 gram.
Minimum size: Minimum permissible investment will be 1 gram of gold.
Maximum limit: Maximum limit of subscription shall be of 4 kg for individuals, 4 kg for Hindu Undivided Family (HUF) and 20 kg for trusts and similar entities notified by the government from time to time.
Interest rate: The investors will be compensated at a fixed rate of 2.50 per cent per annum payable semi-annually on the nominal value.
Tenor: The tenor of the bond is 8 years. Early encashment/redemption of the bond is allowed after fifth year from the date of issue on coupon payment dates.
Redemption: redemption price will be in Indian Rupees based on previous 3 working days simple average of closing price of gold of 999 purity published by IBJA.
Collateral: Bonds can be used as collateral for loans. The loan-to value (LTV) ratio is to be set equal to ordinary gold loan mandated by the Reserve Bank from time to time.