Sovereign Gold Bond subscription ends at the moment. Who can buy new tranche of SGB?

The subscription to the newest tranche of sovereign gold bonds ends at the moment. The difficulty had opened on September 11. The difficulty worth has been fastened at ₹5,923 per gram of gold. The difficulty worth of the gold bonds will probably be ₹50 per gram much less for many who subscribe on-line and pay by means of digital mode.

The worth of bonds is fastened on the premise of a easy common of the closing worth of gold of 999 purity, revealed by the India Bullion and Jewellers Association Ltd for the final three working days of the week previous the subscription interval.

What are SGBs?

SGBs are authorities securities denominated in grams of gold. They are substitutes for holding bodily gold. Investors must pay the difficulty worth in money and the bonds will probably be redeemed in money on maturity. The Bond is issued by the Reserve Bank on behalf of the Government of India.

“We anticipate immense potential advantages from Sovereign Gold Bond Tranche in FY24, providing a safe avenue for buyers looking for publicity to gold. Gold is anticipated to outperform most asset lessons because of the anticipated slowdown in China, and different main economies together with the US. This will drive excessive alpha-seeking buyers to various investments and safer avenues like gold,” said Colin Shah, MD, Kama Jewelry.

According to various analyst estimates Gold is expected to rise by more than 10% GAGR up to the year 2026. Considering these factors, we expect the 2023-24 Series II gold bonds to deliver substantially above-average returns of more than 20% in the long term, added Colin Shah

Anuj Gupta, Head — Commodity & Currency at HDFC Securities said an investor will get an additional 2.5% annual interest on one’s money on absolute value of one’s investment. So, one should apply for this RBI-backed gold investment scheme.

SGB is one of the best investment options for investors aiming for long-term capital growth. “The latest Sovereign Gold Bonds Series II fixed at ₹5873/gm, a ₹3 discount from previous tranches, will be ideal for investors willing to hold on to their investment for at least 5 years,” stated Nish Bhatt, Founder & CEO, Millwood Kane International.

So buyers choosing SGBs ought to have a long-term funding horizon to maximise their advantages, added Nish Bhatt.

SGB redemption

On maturity, the Gold Bonds shall be redeemed in Indian Rupees and the redemption worth shall be based mostly on a easy common of the closing worth of gold of 999 purity of the earlier 3 enterprise days from the date of compensation, revealed by the India Bullion and Jewelers Association Limited. Both curiosity and redemption proceeds will probably be credited to the checking account furnished by the shopper on the time of shopping for the bond.

Disclaimer: The views and proposals made above are these of particular person analysts, and never of Mint. We advise buyers to test with licensed specialists earlier than taking any funding selections.

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Updated: 15 Sep 2023, 01:19 PM IST