The Reserve Bank of India (RBI) on February 9, 2023, announced the issue price of the final tranche of Sovereign Gold Bonds (SGBs) for the 2023-24 series. Subscribers can buy one unit SGB (Series IV) 2023-24 at Rs 6,263, which is the price per gram. One unit of SGB is denominated as 1 gram of gold. RBI offers a discount of Rs 50 per gram for those investors applying online and making the payment against the application through digital mode. For such investors, the issue price of Gold Bond will be Rs 6,213 per gram of gold.
The price is based on the simple average of the closing price [published by the India Bullion and Jewellers Association Ltd (IBJA)] for gold of 999 purity in the last three working days of the week preceding the subscription period. This issue fo open for subscription on February 12, 2023, and will close on February 16, 2023. Successful applicants will receive their SGBs on February 21, 2024.
The minimum investment in SGBs is one gram, while the maximum subscription limit is 4 kg for individuals.
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 in the required details in the registration form and click submit. Specify the desired subscription quantity and provide nominee details. Complete the purchase by clicking 'Submit'.
Sovereign Gold Bonds (SGBs) present an attractive investment avenue in gold with an annual interest rate of 2.50 per cent, credited semi-annually to investors' bank accounts, and also tax-free redemption upon maturity.
While SGBs have lower liquidity than physical gold, they can 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. 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 maintain that SGB remains the most tax-efficient gold investment.