Today is the final day for subscribing to the final tranche of Sovereign Gold Bonds SGB 2023-24 series. The subscription window, which commenced on February 12, 2024, will close today. The allotment of SGBs will be done on February 21, if the application is successful. Priced at Rs 6,263 per gram, investors can purchase one unit SGB (Series IV) 2023-24, with each unit equivalent to one gram of gold. Those applying online and opting for digital payment can get a discount of Rs 50 per gram.
To apply online via the RBI portal, investors must furnish their email IDs, which need to be uploaded on the Ekuber portal of RBI along with subscription details. Payments can be made through cash (up to Rs 20,000), demand drafts, cheques, or electronic banking.
The SGBs will be sold through Scheduled Commercial banks also. To purchase Sovereign Gold Bonds (SGBs) via the bank website, visit your bank's official website, log in to net banking, and navigate to the 'services' section. Choose the 'Sovereign Gold Bond' option and click 'Proceed' after agreeing to the terms and conditions. Fill out the registration form with the proof of payment done through a Cheque or DD. Fill in the required and additional details and click submit. Specify the desired subscription quantity and provide nominee details. Complete the purchase by clicking 'Submit'.
Sovereign Gold Bonds (SGBs) provide an annual interest rate of 2.50 per cent, credited semi-annually to investors' bank accounts, and also tax-free redemption upon maturity. SGBs can also be traded on stock exchanges within a fortnight of issuance.
While historical data suggests an average return of 11.2 per cent over the last 20 years, investors should note that market fluctuations can impact SGB values, especially during periods of inflation or global economic uncertainty. For instance, the buying price of this SGB is 6,263 per gram but the current price of SGB as of IBJA is Rs 6,168 as of 2.50 pm February 16, 2023. Gold dipped below USD 2,000 an ounce for the first time since December as a hotter-than-expected US inflation report diminished hopes that the Federal Reserve may soon pivot to monetary easing, said IBJA on February 14, 2023.
Critics point out that gold had lost 83 per cent of its international purchasing power between 1980 and 2001, and has not yet reached inflation-adjusted price 43 years later and it just fared better in Rupees due to currency depreciation and import duties. Nevertheless, they are a tax-efficient gold investment. Investors can consider investing in gold up to 5 per cent of their portfolio as part of a hedge and diversification but keep in mind that it should be kept for the long term.
