Sovereign Gold Bond Scheme Subscription from Monday, Know the Issue Price and Other Details

Sovereign Gold Bond issued by the RBI on behalf of the government of India is live for subscription from Monday. The issue price is revealed.

Written by: Arjita Gupta

Edited by: Krutarth Ghosalkar

Last Updated: March 06, 2023

The Sovereign Gold Bond Scheme – Series IV 2022 to 2023 opens for subscription and will open for five days starting today, Monday. Rs. 5,611 is the fixed issue price per gram of gold. The Reserve Bank of India (RBI) has affirmed Rs. 5,611 as the nominal value set for the bond. It is RBI that issues the SGB on behalf of the Indian government. A discount offers per gram of gold, amounting to Rs. 50 has been decided upon by the Government of India after consultation with the RBI.

· The discount will attract investors and they will be able to buy SGB at an affordable rate. In December 2022, the rate was Rs. 5,049. The current subscription is open till 10 March 2023.

· The Rs. 50 is a reduction from the fixed nominal value for the investors who apply through digital mode i.e., pay online against the application. This investment is a fine alternative to physical gold.

· According to RBI, for eligible investors, Rs. 5,561 is the gold bond’s issue price per gram of gold. The price has been set considering the simple average of the closing price since the beginning of the month.

You can invest in Sovereign Gold Bond through designated post offices, SHCIL (Stock Holding Corporation of India Limited), and recognized stock exchanges such as the Bombay Stock Exchange Limited and the National Stock Exchange of India. The interest rate on the initial investment in these bonds is 2.50% per annum. A Certificate of Holding will be provided to the investors.

You can convert the SGBs into demat form. Sovereign Gold Bonds can also be submitted as collateral for loans with LTV (loan-to-value) ratio the same as that for general gold as per the RBI. Those paying online can do so from UPI. And those purchasing the SGBs physically can pay in cash up to Rs. 20,000, or pay via cheque, or demand draft.

You can get 8 years of tenure for the Sovereign Gold Bond. There is also premature redemption following the 5^th year to exercise on the date wherein the interest is paid. The basic unit is 1 gram and the bonds are available in the multiples of grams. So, the lock-in period mentioned is like the exit option occurs only after 5 years where the next payment of interest is dated at. But the actual tenure is of 8 years.