Sovereign Gold Bonds (SGBs): The Reserve Bank of India (RBI) has released a calendar for the premature redemption of the Sovereign Gold Bonds (SGBs) issued between May 2017 and March 2020. The central bank plans to process the redemption of 30 SGBs from October 11, 2024, to March 1, 2025.
According to RBI guidelines, SGB holders can request premature redemption of gold bonds after a five-year holding period from the date of the issue. ‘’In terms of the Consolidated Procedural Guidelines on the SGB Scheme issued by the RBI, premature redemption of the gold bonds is permitted after five years from the date of issue of such bonds,” said the central bank.
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The central bank has emphasised that investors must adhere to the designated submission periods and note that redemption dates can shift in case of unscheduled holidays. For more details, investors are advised to review the official RBI circular or contact their bond-issuing authorities. Investors can view the redemption calendar here: https://www.rbi.org.in/Scripts/BS_PressReleaseDisplay.aspx?prid=58564
‘’It may, however, be noted that the above-mentioned dates may undergo a change in case of unscheduled holiday/s. Investors are advised to take note of the period for submission of requests for redemption of SGB, in case they choose to redeem their holdings before maturity,” said RBI in its statement.
Sovereign Gold Bonds
Launched under the Government Securities Act of 2006, SGB offers investors a systematic option to invest in gold. It caters to investors, including individuals, trusts, charitable institutions, and universities. The bonds allow investments starting from one gram of gold, with individuals allowed a maximum of 4 kg per fiscal year and trusts and similar entities up to 20 kg.
SGBs are issued by the RBI on behalf of the government. These bonds are available in multiples of grams of gold, with the basic unit being 1 gram, and the minimum investment permitted is 1 gram. Investors in sovereign gold bonds receive an annual interest rate of 2.50 per cent. These bonds have a maturity period of eight years, with an option to exit after the fifth year.
Benefits of investing in SGB
-Investing in SGBs can help you diversify your portfolio.
-Backed by the RBI, these gold bonds boast enhanced credibility.
-They offer an appealing return rate.
-SGBs appreciate in capital as their value increases with the price of gold.
-Additionally, the interest earned on SGBs is exempt from income tax.