Sovereign Gold Bond issue price Rs 5,000 per gm: Benefits, Risk to Interest rate, 8 things you just cannot ignore

Gold is on everyone's buying list. However, gold price has been rising to all-time highs and is still ruling at rates that are very, very high. So, if you get an opportunity to buy gold cheap, where you can make huge profit, then what will you do? Our expert says you should buy. RBI has released Sovereign Gold bond scheme in its 9th tranche as of today

ZeeBiz WebTeam | Dec 29, 2020, 10:49 AM IST

Gold is on everyone's buying list. However, gold price has been rising to all-time highs and is still ruling at rates that are very, very high. So, if you get an opportunity to buy gold cheap, where you can make huge profit, then what will you do? Our expert says you should buy. RBI has released Sovereign Gold bond scheme in its 9th tranche as of today. Sovereign Gold bond issue price has been fixed at Rs 5,000 per gm. Those who buy online can get an additional discount of Rs 50. However, to really make a profit, here are top 5 Sovereign Gold Bond Scheme points you should know to make money. 

The Sovereign Gold Bond Scheme 2020-21 - Series IX will be open for subscription from December 28, 2020 to January 1, 2021. "The nominal value of the bond...Works out to Rs 5,000 per gram of gold," the RBI said. Pic Credit: Reuters

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Sovereign Gold Bond Scheme Benefits

Sovereign Gold Bond Scheme Benefits

a) People prefer buying physical gold. This is generally in form of jewellery.  However, in this, the making charges are added to gold price, making it expensive and when you go to sell, you get less money. So, one of teh best benefits of Sovereign Gold Bond Scheme is this.

b) Another Sovereign Gold Bond Scheme benefit is that the investor receives the current/ongoing market price at the time of redemption or  premature redemption. The SGB offers a superior alternative to holding gold in physical form. The risks and costs of storage are eliminated. SGB investors are assured of the market value of gold at the time of maturity and periodical interest.

c) The Sovereign Gold Bonds are held in the books of the RBI or in demat form eliminating risk of loss of scrip etc. Pic Credit: Reuters

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Sovereign Gold Bond Scheme: What are the risks involved in buying SGB?

Sovereign Gold Bond Scheme: What are the risks involved in buying SGB?

In Sovereign Gold Bond Scheme, there may be a risk of capital loss if the market price of gold declines. However, the investor does not lose in terms of the units of gold which he has paid for. Pic Credit: Reuters

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How much gold can you buy under Sovereign Gold Bond Scheme

How much gold can you buy under Sovereign Gold Bond Scheme

The Sovereign Gold Bond Scheme issues bonds in denominations of one gram of gold and in multiples thereof. Minimum investment in Sovereign Gold Bond Scheme shall be one gram with a maximum limit of subscription of 4 kg for individuals, 4 kg for Hindu Undivided Family (HUF) and 20 kg for trusts and similar entities notified by the government from time to time per fiscal year (April – March). Pic Credit: Reuters

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What is Sovereign Gold Bond Scheme rate of interest?

What is Sovereign Gold Bond Scheme rate of interest?

The Sovereign Gold Bond Scheme interest rate given to investors is 2.50 per cent (fixed rate) per annum on the amount of initial investment. Sovereign Gold Bond Scheme interest will be credited semi-annually to the bank account of the investor. The last Sovereign Gold Bond Scheme interest will be payable on maturity along with the principal. Pic Credit: Reuters

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What is Sovereign Gold Bond Scheme price on selling?

What is Sovereign Gold Bond Scheme price on selling?

The nominal value of Sovereign Gold Bond Scheme is fixed on the basis of simple average of closing price of gold of 999 purity, published by the India Bullion and Jewelers Association Ltd for the last 3 business days of the week preceding the subscription period. Pic Credit: Reuters

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What is Sovereign Gold Bond Scheme redemption price?

What is Sovereign Gold Bond Scheme redemption price?

On maturity, the Gold Bonds Scheme redemption price shall be based on simple average of closing price of gold of 999 purity of previous 3 business days from the date of repayment, published by the India Bullion and Jewelers Association Ltd. Pic Credit: Reuters

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How will Sovereign Gold Bond Scheme redemption amount be paid?

How will Sovereign Gold Bond Scheme redemption amount be paid?

Both Sovereign Gold Bond Scheme interest and redemption proceeds will be credited to the bank account furnished by the customer at the time of buying the bond. Pic Credit: Reuters

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How to buy Sovereign Gold Bonds - Payment method?

How to buy Sovereign Gold Bonds - Payment method?

Payment for Sovereign Gold Bond Scheme can be made through cash (up to Rs 20,000). SGB can be paid for via cheques, demand draft, or even electronic fund transfer.