First tranche of Sovereign Gold Bonds Scheme for the year 2017-18 has opened for subscription from April 24, 2017.
Details about Sovereign Gold Bonds Scheme 2017-18–Series I:
- Subscription Date: 24 -28 April, 2017
- Bonds Issue Date: May 12, 2017
- Issue Price: Rs. 2901 per gram of gold – includes a discount of Rs. 50/gram on nominal value.
- Tenure: 8 years
- Interest Rate: 2.75% per annum, payable every 6 months on initial investment.
- Exit Option: From 5th year onwards, to be exercised on interest payment dates
- Denomination and Limits: Minimum Unit of 1 gm and maximum of 500 gm per person per fiscal
- Sold By: Banks, Post Offices, Stock Holding Corporation of India (SHCIL), National Stock Exchange (NSE) and Bombay Stock Exchange (BSE)
Nominal value is the simple average of closing price (published by the India Bullion and Jewellers Association) for gold of 999 purity of the week preceding the subscription period i.e. from 17-21 April 2017.
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.
- Till date, seven tranches of SGBs have been issued and as result 6,410 kg of gold has been mobilised.
- 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:
- So far, in every tranche the issue price was set at a discount of Rs. 50/gm of nominal value of gold, which itself is a benefit for individual buyers.
- 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.