As per a press release issued by RBI, set the issue price of the latest SGB tranche at Rs 5,611 per gram. For the previous tranche, the RBI had set the issue price at Rs 5,409 per gram.
It should be noted that investors who submit their applications online and pay for their investments electronically are eligible for a Rs 50 per gram discount. For such investors, the issue price of Gold Bond will be Rs 5,561/- (Rupees Five thousand five hundred and sixty one only) per gram of gold.
How issue price is calculated
The nominal value of the bond is equal to Rs. 5,611/- (Rupees Five thousand six hundred eleven only) per gram of gold based on the simple average of closing prices [published by the India Bullion and Jewellers Association Ltd (IBJA)] for gold of 999 purity for the last three working days of the week prior to the subscription period, i.e. March 01, March 02, and March 03, 2023.
What is Sovereign Gold Bond (SGB)?
SGBs are government securities denominated in grams of gold. These are alternatives for physical gold. Investors must pay the issue price in cash, and the bonds will be redeemed in cash at maturity. The bond is issued by the Reserve Bank of India on behalf of the Government of India. Important FAQs on SGB as per the ICICI Bank website.
What is the rate of interest and how will the interest be paid?
The interest and price will be notified by RBI at the time of issuance. Interest will be credited semiannually to the bank account of the investor and the last interest will be payable on maturity along with the principal.
Can I buy 4Kg worth of SGB every year?
Yes. An individual can buy 4Kg worth of gold every year as the ceiling has been fixed on a fiscal year (April-March) basis.
Are there any risks in investing in SGBs?
There may be a risk of capital loss if the market price of gold declines. However, the investor does not lose in terms of the units of gold which he has paid for.
Is tax deducted at source (TDS) applicable on the bond?
TDS is not applicable on the bond. However, it is the responsibility of the bond holder to comply with the tax laws.
Can a Minor invest in SGB?
Yes. The application on behalf of the minor can be made by his / her guardian through a branch. Minor account holders cannot apply for SGB in the online mode.
Can I buy 4Kg in the name of each of my family members?
Yes, each family member can hold the bond if they satisfy the eligibility criteria for investing in Sovereign Gold Bond.
Is the maximum limit of 4 Kg applicable in case of joint holding?
The maximum limit will be applicable for the first applicant in case of a joint holding for the specific application.