RBI has announced details of Sovereign Gold Scheme Series III for 2023-24. Sovereign gold bonds have a fixed interest rate and a remaining term of eight years. Gold is generally considered for investment purposes and serves both diversification and hedging purposes. The Indian government announced this plan to stop Indians from owning physical gold. The last time these bonds were issued was in his Dce-2022.This article details: Sovereign Gold Bonds 2023-24 Series IIIsuch as subscription date and investor eligibility criteria.
Sovereign Gold Bond Series III – 2023-24 – Issuance Details
The public issue of SGB Scheme Series III 2023-2024 will be open for subscription for five days from December 18 to December 22, 2023. These bonds will be issued on the settlement date of December 28, 2023, and units will be credited to your account by this date.
RBI has fixed the price of this sovereign gold bond at Rs 6,199 per gram of gold.
Gold prices have increased by more than 10% in the last year. A year ago, in December 2022, the issue price of SGB Scheme 2022-23 Series III was Rs 5,409 at RBI.
These gold bonds are offered at a discount of Rs 50 per gram by investors when they are purchased through digital online mode. After discount, the pure gold price per unit is Rs 6,149 for purchase through online/digital mode. The bond also carries a fixed interest rate of 2.5% per year, payable semi-annually.
Investors are required to invest at least 1 gram of gold in SGB. The holding period for these gold bonds is 8 years, with an early redemption option after 5 years. Investors can sell on the stock exchange before the maturity date, but the unit price may be lower depending on buyer demand.
Capital gains tax is not payable on maturity redemption of sovereign gold bonds. Additionally, these sovereign gold bonds can be used as collateral when taking out loans.
The interest received on these bonds is taxable in the hands of the investor.
How can I invest in these bonds?
If you have a demat account, the process is simple. Log in to your demat account, visit the gold bonds section, select these bonds and make the payment. The bond will be credited to your demat account on the settlement date.
If you do not have a demat account, you can follow the offline process. Log into your bank’s website and go to the gold bond section to make your purchase. Gold bonds will be sent to your registered email address.
In the future, if you lose your gold bond certificate, it may be difficult to trace the certificate in offline/physical certificate mode. Therefore, it is recommended to purchase only through demat account. This ensures the safety of the gold certificate and the maturity amount is simultaneously credited to the bank account linked to the demat.
Who can purchase the 2023-2024 Sovereign Gold Bond Series III?
Many investors consider gold as a valuable asset for diversification. If you plan to purchase physical gold as a gift after eight years or more and are concerned about rising gold prices, consider investing in gold bonds now. This allows you to earn 2.5% interest and benefit from the potential appreciation of gold at maturity.
Investors often look at gold as a means of diversification beyond investing in stocks and bonds. These bonds have no credit risk and are backed by sovereign guarantees, ensuring both capital safety and interest payments.
You can also invest in sovereign gold bonds through the secondary market, which is traded at low prices on the NSE.
Suresh KP is the founder of Myinvestmentideas. He is a NISM Certified Investment Advisor and he is a NISM Certified Research Analyst. He has been analyzing financial markets for the past 20 years. He can be reached at suresh@myinvestmentideas.com.
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