Government issued Sovereign Gold Bond Scheme 2020-21 Series IX — opens for subscription today.
Sovereign Gold Bonds (SGBs) are government-backed securities issued by the Reserve Bank of India (RBI). The bonds are denominated in grams of gold with 999 purity. The RBI issues these bonds on behalf of the government and are open for subscription from December 28, 2020, to January 1, 2021. For those looking to invest in gold, SGBs are a safe method to park money.
The nominal value of the bond is based on the simple average closing price [published by the India Bullion and Jewellers Association Ltd (IBJA)] for gold of 999 purity of the last three business days of the week preceding the subscription period — December 22 - 24, 2020, works out to Rs 5,000. The tenure of the bond will be for a period of eight years with exit option after fifth year to be exercised on the interest payment dates.
The Union government in consultation with the RBI, has decided to offer a discount of Rs 50 per gram less than the nominal value to those investors applying online and the payment against the application is made through digital mode. For such investors, the issue price of SGB will be Rs 4,950 per gram of gold, according to RBI.
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