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.
Details 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.