Sovereign Gold Bond (SGB) Scheme

• The Reserve Bank of India (RBI) announced the Sovereign Gold Bond (SGB) Scheme Series III for the fiscal year 2023-2024.

ABOUT SOVEREIGN GOLD BONDS SCHEME

• Sovereign Gold Bonds (SGBs) are government securities denominated in grams of gold, providing a viable alternative to owning physical gold.
• Investors are required to pay the issue price in cash and receive a cash redemption upon maturity.
• Issued by the Reserve Bank of India on behalf of the Government of India, these bonds offer investor protection by ensuring they receive the prevailing market price of gold upon redemption.
• This guarantees the value of the initially invested quantity of gold, making SGBs a more favorable option compared to holding physical gold.
• Eligibility
  • Individuals categorized as residents in India under the Foreign Exchange Management Act, 1999, such as individuals, Hindu Undivided Families (HUFs), trusts, universities, and charitable institutions, are eligible to invest in Sovereign Gold Bonds (SGBs).
• Payment
  • Sovereign Gold Bonds (SGBs) offer a fixed interest rate of 2.50% per annum on the initial investment amount.
  • The interest is credited semi-annually to the investor’s bank account, and the final interest payment is made upon maturity, along with the principal amount invested.
• Limits
  • The minimum investment in SGBs is 1 gram, and these bonds are issued in denominations of one gram or multiples thereof.
  • For individual investors and Hindu Undivided Family (HUF) investors, the maximum subscription limit is 4 kg per fiscal year (April-March).
  • Trusts and similar entities, as notified by the government, have a higher maximum limit of 20 kg per fiscal year.
  • In the case of joint investments, the maximum limit applies to the first applicant.