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Government launches first tranche of Sovereign gold bonds for FY19

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Government of India has decided to issue Sovereign Gold Bonds 2018-19 – Series-I. These bonds will be issued by Reserve Bank India (RBI) on behalf of the Government of India.

Government launches first tranche of Sovereign gold bonds for FY19Details about Sovereign Gold Bonds Scheme 2018-19 – Series – I:

Subscription Date: April 16, 2018 to April 20, 2018. Bond Certificate will be issued on May 4, 2018

Denomination: 1 gm multiples

Issue Price: Rs. 3114 per gram. The issue price is the simple average of closing price of gold of 999 purity published by the India Bullion and Jewellers Association Limited for the last 3 business days of the week preceding the subscription period. Discount of Rs. 50 per gm for those who subscribe online and pay through digital mode.

Tenure: 8 years

Interest Rate: 2.50% per annum, payable every 6 months.

Exit Option: From 5th year onwards, to be exercised on interest payment dates

Minimum Size: 1 gm

Maximum Limit: 4 KG for individual, 4 Kg for HUF and 20 Kg for trusts and similar entities per fiscal (April-March) notified by the Government from time to time.

Sold By: Banks, Post Offices, Stock Holding Corporation of India (SHCIL), National Stock Exchange (NSE) and Bombay Stock Exchange (BSE)

About Sovereign Gold Bonds Scheme:

The Sovereign Gold Bonds Scheme was first announced in Union Budget 2015-16. Consequentially, the first tranche was issued in November 2015.

  • There were two objectives behind launching Sovereign Gold Bonds. Firstly to reduce the demand of physical gold and thereby reduce the import bill of the country.
  • Secondly, the funds deployed in Gold Bonds can be used for developmental projects in the country.

Benefits of Sovereign Gold Bonds:

  • The investors get stipulated interest on the bonds and can also get the benefit if the price of gold appreciates in future.
  • These bonds are highly liquid, just as physical gold. These bonds can even be placed as collaterals while seeking loan.
  • Buying Gold bonds eliminates the need for conducting quality check, which is required while buying physical gold.
  • For buyers of physical gold, storage and security issues are always a concern. There are no such concerns for gold bonds as they are issued in paper form and can even be dematerialised.