Sovereign Gold Bond 2018-19 Series II opens October 15: Check issue price, discount per gram - All details

Sovereign Gold Bonds 2018-19 (Series II): The Government of India will issue the  Sovereign Gold Bonds (SGB) 2018-19 for public subscription from October 15-19 at an issue price of Rs 3,146 per gram of gold. "Govt of India, in consultation with the RBI, Sovereign Gold Bonds 2018-19 (Series II) will be opened for the period October 15-19, 2018. The issue price of the Bond during this subscription period i.e. Oct.15-19, 2018, shall be Rs. 3,146  per gram with Settlement on Oct.23, 2018," Ministry of Finance tweeted. 

"Govt of India in consultation with the RBI has decided to allow discount of Rs. 50 per gram from the issue price to those investors who apply online & the payment is made through digital mode. For such investors the issue price of Gold Bond will be Rs.3,096 per gram of gold," it added. 

SGBs are denominated in multiples of gram of gold with a minimum unit of one gram and can also be held in demat form.

In another statement earlier this week, the government had said that bonds would earn an interest of 2.5 per cent per annum, payable every six months on the nominal value. The bond certificates would be issued on October 23. "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 Ltd for the last three working days of the week preceding the subscription period," the government statement had said.

ALSO READ | Buy Gold at 16% discount: Check Modi government's Sovereign Gold Bond scheme details

The tenure of the bond will be for a period of eight years, with an exit option from the fifth, sixth and seventh year, to be exercised on the interest payment dates.

The Sovereign Gold Bonds will be issued every month from October 2018 to February 2019. 

Where to buy 

The bonds would be sold through banks, designated post offices, Stock Holding Corporation of India (SHCIL) and recognised stock exchanges -- the National Stock Exchange and the Bombay Stock Exchange.

What is SGB?

The Government of India had launched the Sovereign Gold Bond Scheme in November 2015 as an alternative to purchasing metal gold and mobilise the idle gold held by households and institutions into productive use in the long run. The scheme envisages to reduce the current account deficit by reducing the country`s reliance on the import of gold to meet the domestic demand.

You can buy the metal at 14-16% discount by investing in the Sovereign Gold Bonds in the secondary market. The RBI-issued SGBs are currently trading at discounted prices as compared to the prevailing gold prices in the open market. SGBs are meant for those who want to make money by investing in gold. Though they have to do it differently, or in other words, not in terms of real, physical metal.

(With agency inputs)