Sovereign Gold Bond 2023: All you need to know about this scheme

Sovereign Gold Bond 2023: Sovereign Gold Bond Scheme (SGB) ​​is a government bond expressed in grams of gold. They take the place of holding physical gold. Investors must pay the issue price in cash and the bonds will be redeemed in cash at maturity. This bond is issued by the Reserve Bank on behalf of the Government of India.

What are the advantages of Sovereign Gold Bond Scheme

The amount of gold an investor pays is protected as they receive the current market price at the time of redemption/early redemption. Sovereign Gold Bond Scheme ​​offers a better alternative to holding gold in physical form. Storage risks and costs are eliminated. Investors are guaranteed the market value of gold at maturity and regular interest. For gold in gemstone form, SGB has no tax or purity issues. Bonds are held in RBI book or dematter form, eliminating the risk of losing scripts etc.

What are the risk in SGB Scheme?

If the market price of gold falls, we may face the risk of capital loss. However, Investors do not lose the Gold Units they have paid for.

Who can apply or invest in Sovereign Gold Bond Scheme?

Indian residents within the meaning of the Foreign Exchange Control Act 1999 are eligible to invest in SGBs. Eligible investors include individuals, HUFs, foundations, universities and non-profit organizations. A retail investor who subsequently changes resident status from resident to non-resident can continue to hold her SGB until early repayment/maturity.

Minimum and Maximum investment amounts in SGB Scheme

Bonds are issued in units of 1 gram of gold and its multiples. The minimum investment in bonds is 1 gram, with a maximum of 4kg for individuals, 4kg for Hindu Undivided Family (HUF) and 20kg for trusts and similar entities as notified by the Government from time to time on a yearly basis. (April-March).

In the case of joint participation, it is limited to the first person. The annual cap includes bonds subscribed in different tranches at the time of initial state issuance and bonds purchased in the secondary market. Investment limits do not include holdings as collateral from banks or other financial institutions.

How to exit investment from Sovereign Gold Bond Scheme

In case of early redemption, the investor may contact the relevant bank/SHCIL office/post office/agent 30 days prior to his coupon payment date. A request for early redemption will only be considered if the investor contacts the relevant bank/post office at least one day before her coupon payment date. Proceeds will be credited to the customer’s bank account specified at the time of bond application.

What if an investor dies under SGB Scheme?

The bond nominee may contact the respective approval point to make a claim. Nominees’ claims will be recognized pursuant to the provisions of the Government Securities Act of 2006, read in conjunction with Chapter III of the Government Securities Regulations, 2007. Custodians are submitted. Please note that the above provisions also apply in the case of deceased retail customers. In such cases, ownership of the Notes will still vest in those who meet the criteria under the Government Securities Act 2006, and not necessarily to the Natural Guardian.

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