New Delhi, February 2: The Sovereign Gold Bond Scheme 2018-19 (Series 6) will be opened from Monday, 4th February 2019 and will continue till Friday, 8th February 2019. Investors who apply online and make the payment through digital mode will get a discount of 50 rupees per gram from the issue price. The issue price of the Bond during this period will be Rs 3,326 per gram. These bonds are being sold through banks, Stock Holding Corporation of India Limited (SHCIL), designated post offices, and stock exchanges-NSE and BSE. Gold Prices Weaken as Union Minister Piyush Goyal Presents Interim Budget 2019.

According to a government release, the issue price of the gold bond during the subscription period shall be Rs 3,326 (Rupees Three Thousand Three Hundred Twenty-Six only) – per gram with Settlement date February 12, 2019, as also published by RBI in its release dated 1 February 2019. Gold Loses Sheen in Diwali Trade at Bullion Market.

In its press release, the Finance Ministry said, the Centre in consultation with the Reserve Bank of India (RBI) has decided to allow a discount of 50 rupees per gram from the issue price to those investors who apply online and make the payment through digital mode. For such investors, the issue price of Gold Bond will be Rs.3,276 (Rupees Three Thousand Two Hundred Seventy-Six only) per gram of gold.

What is the sovereign gold bond scheme:

Sovereign Gold Bond (SGB) Scheme is a form of investment offered by Reserve Bank of India (RBI) on behalf of Government of India. Gold Bonds are denominated in grams and can be purchased as an alternative to physical gold. The SGB can be easily redeemed to cash.

According to reports, the biggest advantage of holding gold bond instead of physical gold is the payment of interest as sovereign bondholders would be paid periodical interest @ 2.50% yearly on the quantity of initial investment. There is no interest paid on physical gold holding.

How to buy and sell Sovereign Gold Bonds (SGBs):

SGBs can be purchased from banks in India. An individual who is interested in buying gold bond must make a minimum investment of one gram. The maximum limit of gold bond that can be purchased is 4 KG for individuals, 4 Kg for HUFs and 20 Kg for trusts and similar entities per fiscal (April-March) notified by the Government from time to time.

According to reports, the tenure of the gold bond will be for a period of 8 years with an exit option from 5th year onwards to be exercised on the interest payment dates. The selling price of the gold bond will be fixed in Indian Rupees while the redemption price will be based on the simple average of closing price of gold of previous 3 business days.

The sovereign gold bond scheme was launched in November 2015 with an objective to reduce the demand for physical gold. Under the scheme, the bonds are denominated in units of one gram of gold and multiples thereof.

Last year, the RBI had said in a release that Sovereign Gold Bonds will be issued every month from October 2018 to February 2019 as per the calendar specified. The first tranche of the scheme was opened for subscription from October 15-19 and the bonds were issued on October 23. The second tranche was opened from November 5-9 and issuance was done on November 13. The next one was available for subscription from December 24-28 and the bonds were issued on January 1, 2019. Another tranche was opened for subscription from January 14-18 and the issuance of bonds was done on January 22. The final one would be from February 4-8 and bonds would be issued on February 12.

(The above story first appeared on LatestLY on Feb 02, 2019 06:43 PM IST. For more news and updates on politics, world, sports, entertainment and lifestyle, log on to our website