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4th tranche of sovereign gold bond scheme opens today

SGB gives an interest of 2.75 per cent per year, payable every six months on preliminary investment

Policy Pulse
Publish Date: Jul 18 2016 3:02PM | Updated Date: Jul 18 2016 3:02PM

4th tranche of sovereign gold bond scheme opens today

 Fourth tranche of Sovereign Gold Bond (SGB) scheme has opened for subscription on Monday.

 
It is the scheme through which the Centre hopes to attract a large number of investors to limit the demand for physical gold that is imported in large quantities exhausting the country’s foreign exchange.
 
The SGB issue price has been fixed at Rs 3,119 per gram.
 
A person can invest for a minimum unit of one gram and a maximum of 500 grams. The subscription is open till Friday this week.
 
First three tranches had attracted an investment of Rs 1,318 crore, equivalent to 4.9 tonnes of gold at the prices prevailing at those times. 
 
With extra features, it is expected that the fourth tranche of SGB would gather much higher investment.
 
SGBs can be purchased from stock exchanges NSE and BSE, select post offices, all bank branches, and Stock Holding Corporation of India Ltd.
 
SGB offer a substitute to holding gold in physical form. The scheme was announced by the Government on October 30, 2015.
 
“Large number of investors and mutual fund players are set to benefit from National Stock Exchange electronic mutual fund platform which has started offering subscription to sovereign gold bonds,” NSE said in a statement.
 
SGB gives an interest of 2.75 per cent per year, payable every six months on preliminary investment minus the risk of theft/loss or impurities associated with physical gold.
 
Bond can be transformed into demat form and used as security for availing loans. 
 
It will be payable again after eight years from the date of issue and early redemption is permitted after 5th, 6th and 7th years from the date of issue.