Akshaya Tritiya 2018: Now, banks step forward to make special physical gold, sovereign gold bond offers
During this occasion, demand for gold, particularly physical gold in the form of jewelry, bars and coins usually witnesses a huge rise.
As India celebrates Akshaya Tritiya 2018 today, banks like Allahabad Bank and State Bank of India (SBI) did not miss out on the occasion, as they are offering a number of deals for customers to purchase of both physical and non-physical yellow metal like sovereign gold bonds (SGB). During this occasion, demand for gold, particularly physical gold in the form of jewelry, bars and coins usually witnesses a huge rise.
Here’s what you need to know about the offers made by both the banks.
Allahabad Bank on it’s Twitter account @AllBank1865 said, “Invest in Allahabad Bank Sovereign Gold Bonds Scheme during the auspicious period of Akshaya Tritiya.”
— Allahabad Bank (@AllBank1865) April 16, 2018
Also, government, in consultation with the Reserve Bank of India, has decided to issue Sovereign Gold Bond, 2018-19-Series-I. Applications for the bond will be accepted from April 16-20, 2018.
On Allahabad Bank, an individual can opt for SGB at an issue price of Rs 3114 per gram. In good news, the bank further offered Rs 50 per gram discount for online applicants through internet banking. On initial investment, a customer will earn interest rate of 2.50%.
The Bonds will be restricted for sale to resident Indian entities including individuals, HUFs, Trusts, Universities and Charitable Institutions. The Bonds will be denominated in multiples of gram(s) of gold with a basic unit of 1 gram.
The tenor of the Bond will be for a period of 8 years with exit option in 5th, 6th and 7th year, to be exercised on the interest payment dates.This can come as a good option, as we Indians love to buy gold but selling is something we don’t follow quite right away. Thus, one might else well, invest in SGB and earn interest rate also considering it eliminates the issue of theft which is usually high in physical gold.
Payment for the Bonds will be through cash payment (upto a maximum of Rs. 20,000/-) or demand draft or cheque or electronic banking.
Price of Bond will be fixed in Indian Rupees on the basis of simple average of closing price of gold of 999 purity published by the India Bullion and Jewellers Association Limited for the last 3 business days of the week preceding the subscription period.
Going ahead, SBI offers a revamped Gold Deposit Scheme (R- GDS) which helps customers deposit their idle gold under R- GDS which will provide them safety, interest earnings and a lot more. It’s more like fixed deposit in gold.
One can invest gold in R-GDS for short term period between 1 to 3 years, medium tenure of 5-7 years and long term to 12-15 years. The deposit will be accepted by the Bank on behalf of the Central Government. Redemption of the deposit will be only in INR equivalent of the value of gold as per then prevailing price of gold.
Purpose of this revamped GDS is to mobilize the idle gold in the country and put it into productive use. And also provide the customers an opportunity to earn interest income on their idle gold holdings.
There are no upper limit of deposit in gold, however minimum deposit must be at 30 gram of yellow in SBI.
The current interest rates are: 0.50% p.a. for 1 year, 0.55 % for 2 years and 0.60% for 3 years. For the medium term tenure the interest rate that a customer will earn in 2.25% and for long term the interest rate is at 2.50%.
Gold i.e. Gold bars, Coins, Jewellery etc. will be accepted in scrap form only.Customers to submit Application Form, Identification Proof, Address Proof and Inventory Form. Depositor to approach the Authorised Branch, where gold deposit has been made.
Therefore, what are we waiting for? Purchase gold in GDS form and earn interest on it. On physical gold that is not possible. This can help you plan for future occasions including even weddings.
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