5 Minutes Read

Premature redemption price for SGB 2016-17 Series II set at ₹6,601: Know ways to withdraw gold bonds

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

 Listen to the Article (6 Minutes)

Summary

The redemption price of SGB is based on the simple average of the closing gold price of 999 purity of the previous three business days from the date of redemption as published by the India Bullion and Jewellers Association (IBJA).

The Reserve Bank of India (RBI) has announced the premature redemption price for sovereign gold bond (SGB) Series II of 2016-17 due on March 30, 2024. The premature redemption rate for the same is ₹6,601 per unit of SGB.

The redemption price of SGB is based on the simple average of the closing gold price of 999 purity of the previous three business days from the date of redemption as published by the India Bullion and Jewellers Association (IBJA).

Accordingly, the redemption price for premature redemption of SGB Series II of 2016-17 is based on the simple average of the closing gold price for the week of March 18-22, 2024.

SGB and its early encashment

Sovereign gold bonds or SGBs are issued by the government, for which investors get a holding certificate. It comprises government securities denominated in gold wherein investors are required to pay the issue price in cash.

Though the tenure of the bond is eight years, early encashment/redemption of the bond is allowed after the fifth year from the date of issue on coupon payment dates.

Ways to prematurely withdraw SGBs

In case of premature redemption, investors can approach the concerned bank/Stock Holding Corporation of India Limited (SHCIL) offices/post office/agent thirty days before the coupon payment date.

Request for premature redemption can only be entertained if the investor approaches the concerned bank/post office at least one day before the coupon payment date, according to the Reserve Bank of India (RBI).

The proceeds are credited to the customer’s bank account provided at the time of applying for the bond.

Maturity

On maturity, these bonds are redeemed in rupees and the redemption price is based on the simple average of the closing price of gold of 999 purity of the previous three business days from the date of repayment, published by the India Bullion and Jewelers Association Limited.

The investors are advised one month before maturity regarding the ensuing maturity of the bond.

On the date of maturity, the maturity proceeds are credited to the bank account as per the details on record.

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index Price Change
nifty 50 ₹16,986.00 -72.15
sensex ₹1,882.60 +28.30
nifty IT ₹2,206.80 +30.85
nifty bank ₹1,318.95 -14.95
index Price Change
nifty 50 ₹16,986.00 -7.15
sensex ₹1,882.60 +8.30
nifty IT ₹2,206.80 +3.85
nifty bank ₹1,318.95 -1.95
index Price Change
nifty 50 ₹16,986.00 -72.15
sensex ₹1,882.60 +28.30
nifty IT ₹2,206.80 +30.85
nifty bank ₹1,318.95 -14.95
index Price Change
nifty 50 ₹16,986.00 -7.15
sensex ₹1,882.60 +8.30
nifty IT ₹2,206.80 +3.85
nifty bank ₹1,318.95 -1.95
index Price Change
nifty 50 ₹16,986.00 -7.15
sensex ₹1,882.60 +8.30
nifty IT ₹2,206.80 +3.85
nifty bank ₹1,318.95 -1.95

Currency

Company Price Chng %Chng
Dollar-Rupee 73.3500 0.0000 0.00
Euro-Rupee 89.0980 0.0100 0.01
Pound-Rupee 103.6360 -0.0750 -0.07
Rupee-100 Yen 0.6734 -0.0003 -0.05
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Sovereign Gold Bonds 2016 Series II to give 126% profit at maturity: Check final redemption date

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Summary

Investors who navigated the eight-year journey with Sovereign Gold Bonds 2016 series II are set to savour the rewards of their patience and strategic investment decisions.

The second batch of Sovereign Gold Bonds (SGB) 2016 will approach maturity on March 28, 2024 (March 29, 2024, being a holiday). The Reserve Bank of India (RBI) recently announced the final redemption price at ₹6,601 per unit, reflecting the simple average closing price of gold for the week of March 18-March 22, 2024, as per the SGB scheme guidelines.

The Sovereign Gold Bonds 2016-II, with an initial issue price of ₹2,916 per gram when launched in March 2016, will yield around 126% gain for investors upon maturity.

The interest on SGB is credited semi-annually to the investor’s bank account, with the final interest payment due along with the principal at maturity.
Investors are provided with a one-month notice before the bond’s maturity, and on the maturity date, the proceeds are credited to the registered bank account.
Investors must update any changes in account details with the bank, Stock Holding Corporation of India (SHCIL) or post office.

Holding SGBs until maturity in the eighth year offers a 100% capital gains exemption for investors, making it an attractive long-term investment option.

Financial experts caution against premature selling, as disposing of SGBs before the eighth year may incur Short-Term Capital Gains (STCG) if sold within three years and a 20% Long-Term Capital Gains (LTCG) tax if sold between three to eight years.

Now, what happens if investors don’t redeem this SGB at maturity?

In most cases, SGBs will be automatically redeemed by the issuer, which, in this case, is the Government of India through the Reserve Bank of India.

The redemption amount will be credited to the bank account provided at the time of purchase.

Meanwhile, if an investor’s account undergoes any updates during this period and they fail to provide the necessary information, it may result in the non-crediting of SGBs.

Opting not to redeem the bonds technically means investors retain ownership of them.

However, they will no longer accrue interest, and their value will be susceptible to market fluctuations.

About SGBs

The SGBs, categorised as Government of India Stock under the Government Securities Act, 2006, offer investors a unique avenue for gold investment.

These allow investors to capitalise on gold price fluctuations without the complexities associated with physical gold transactions.

Upon subscription, investors are furnished with a Certificate of Holding, and these bonds can be converted into demat form.

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

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Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

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KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

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index Price Change
nifty 50 ₹16,986.00 -72.15
sensex ₹1,882.60 +28.30
nifty IT ₹2,206.80 +30.85
nifty bank ₹1,318.95 -14.95
index Price Change
nifty 50 ₹16,986.00 -7.15
sensex ₹1,882.60 +8.30
nifty IT ₹2,206.80 +3.85
nifty bank ₹1,318.95 -1.95
index Price Change
nifty 50 ₹16,986.00 -72.15
sensex ₹1,882.60 +28.30
nifty IT ₹2,206.80 +30.85
nifty bank ₹1,318.95 -14.95
index Price Change
nifty 50 ₹16,986.00 -7.15
sensex ₹1,882.60 +8.30
nifty IT ₹2,206.80 +3.85
nifty bank ₹1,318.95 -1.95
index Price Change
nifty 50 ₹16,986.00 -7.15
sensex ₹1,882.60 +8.30
nifty IT ₹2,206.80 +3.85
nifty bank ₹1,318.95 -1.95

Currency

Company Price Chng %Chng
Dollar-Rupee 73.3500 0.0000 0.00
Euro-Rupee 89.0980 0.0100 0.01
Pound-Rupee 103.6360 -0.0750 -0.07
Rupee-100 Yen 0.6734 -0.0003 -0.05
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Here’s why you should invest in gold mutual funds now

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

 Listen to the Article (6 Minutes)

Summary

Gold Mutual Funds are a category of investment funds that hold assets related to gold. These funds can comprise of various instruments directly linked to gold prices, such as physical gold, gold mining company stocks and more.

Gold mutual funds have recorded returns of over 10% in the past year alone. This surge in performance coincides with a surge in gold prices, which recently breached the $2,200 per ounce mark globally. Back home, the yellow metal hit a fresh lifetime high of ₹66,943 per 10 grams.

The trigger behind this rise lies in a confluence of global factors, including signals from the Federal Reserve indicating potential interest rate cuts amidst rising inflation.

Geopolitical tensions and macroeconomic uncertainties have further contributed to the allure of gold as a safe haven asset.

In such a landscape, gold emerges as a decent investment avenue.

Alekh Yadav, Head of Investment Products at Sanctum Wealth, a wealth management firm, stressed on strategic allocation to gold within investment portfolios.

While talking to CNBC-TV18.com, he mentioned the negative correlation between gold prices and equity markets.

“This makes gold an effective hedge against volatility and market downturns,” he said.

He said the inclusion of gold can lower overall portfolio volatility without significantly compromising expected returns.

But why gold mutual funds?

Here are some factors that make gold mutual funds attractive:

Diversification

Gold mutual funds typically invest in a diversified portfolio of gold-related assets such as gold bullion, gold mining stocks, and gold ETFs.

This diversification helps spread risk across multiple assets within the fund, reducing the impact of underperformance of any single asset on overall returns.

In contrast, direct investment in physical gold or gold bars lacks this diversification.

Professional management

Gold mutual funds are managed by professional fund managers who have expertise in analysing gold markets and making investment decisions.

These managers actively monitor market conditions, adjust portfolio holdings, and seek to optimise returns for investors.

Liquidity

Gold mutual funds offer high liquidity, allowing investors to buy and sell fund units on any business day at the prevailing net asset value (NAV).

This liquidity makes it easy for investors to enter and exit their positions without incurring significant transaction costs associated with physical gold ownership.

Cost efficiency

Gold mutual funds typically have lower investment minimums and expenses compared to other gold investments such as purchasing physical gold or investing in gold mining stocks individually.

Additionally, the operational costs associated with storing and insuring physical gold are eliminated in gold mutual funds.

Tax efficiency

Mehak Srivastava, Head of Marketing at SahiBandhu, a gold loan platform, suggested investors opt for mutual funds due to their potential for capital gains.

Capital gains realised from selling fund units may be subject to favourable long-term capital gains tax rates, depending on the holding period.

If the price of gold rises, the value of the assets held by the mutual fund also increases. This leads to capital gains for investors when they sell their mutual fund units at a higher price than they paid for them.

Additionally, dividends or capital gains distributions received from gold mutual funds may be taxed at lower rates compared to direct investment in gold mining stocks.

A look at returns of gold mutual funds

Fund Name 1-year CAGR 3-year CAGR
Kotak Gold Fund (G) 8.9% 11.7%
HDFC Gold Fund (G) 9.8% 12.1%
Nippon India Gold Savings Fund (G) 9.1% 12.0%
SBI Gold Fund (G) 9.9% 12.2%
Axis Gold Fund (G) 9.5% 12.2%
Quantum Gold Savings Fund (G) 8.8% 12.1%
Invesco India Gold ETF Fund of Fund (G) 8.7% 12.0%

(Source: Scripbox; CAGR stands for compound annual growth rate)

A word of caution

Nitin Shahi, Executive Director at Findoc, a financial service provider, urged caution amid the enthusiasm surrounding gold mutual funds.

While gold mutual funds present an enticing avenue for investment, Shahi emphasised the need for diversified investing tailored to individual risk tolerance and financial objectives.

This means that investors should not solely focus on gold mutual funds but instead consider building a diversified investment portfolio that includes a mix of different asset classes, such as stocks, bonds, real estate, and alternative investments, in addition to gold.

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

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Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

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KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

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index Price Change
nifty 50 ₹16,986.00 -72.15
sensex ₹1,882.60 +28.30
nifty IT ₹2,206.80 +30.85
nifty bank ₹1,318.95 -14.95
index Price Change
nifty 50 ₹16,986.00 -7.15
sensex ₹1,882.60 +8.30
nifty IT ₹2,206.80 +3.85
nifty bank ₹1,318.95 -1.95
index Price Change
nifty 50 ₹16,986.00 -72.15
sensex ₹1,882.60 +28.30
nifty IT ₹2,206.80 +30.85
nifty bank ₹1,318.95 -14.95
index Price Change
nifty 50 ₹16,986.00 -7.15
sensex ₹1,882.60 +8.30
nifty IT ₹2,206.80 +3.85
nifty bank ₹1,318.95 -1.95
index Price Change
nifty 50 ₹16,986.00 -7.15
sensex ₹1,882.60 +8.30
nifty IT ₹2,206.80 +3.85
nifty bank ₹1,318.95 -1.95

Currency

Company Price Chng %Chng
Dollar-Rupee 73.3500 0.0000 0.00
Euro-Rupee 89.0980 0.0100 0.01
Pound-Rupee 103.6360 -0.0750 -0.07
Rupee-100 Yen 0.6734 -0.0003 -0.05
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Gold prices steady after hitting record high: Should you invest in yellow metal now?

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

 Listen to the Article (6 Minutes)

Summary

The surge was driven by a confluence of factors, including expectations of US rate cuts, geopolitical tensions, and concerns about a potential pullback in equity markets.

Gold prices edged lower on Wednesday (March 6) but held above the $2,100 an ounce level, after rising bets for a June US interest rate cut propelled bullion to a record peak in the previous session, ahead of Federal Reserve Chair Jerome Powell’s testimony, according to a Reuters report.

Spot gold edged down 0.2% at $2,124.46 per ounce. US gold futures fell 0.4% to $2,132.90.

On the domestic front, gold was trading at ₹64,750 per 10 grams.

This decline follows the recent achievement of a record peak of $2,141.79 per ounce for gold in the global market. The surge was driven by a confluence of factors, including expectations of US rate cuts, geopolitical tensions, and concerns about a potential pullback in equity markets.

The upward trend in the domestic market mirrors the global pattern.

Rahul Kalantri, VP of Commodities at Mehta Equities, attributes the record-high gold prices to the release of supportive US economic data on Tuesday.

Additionally, profit-taking in US equity markets and stability in the dollar index and US 10-year bond yields played a role.

Market participants, however, are cautious as gold reaches these unprecedented levels.

The upcoming speech by the Fed Chairman regarding inflation and potential interest rate adjustments is expected to be a crucial factor influencing the direction of precious metal markets.

Looking ahead to Wednesday’s session, gold prices are anticipated to continue experiencing volatility.

“Gold is expected to find support in the $2,098-2,082 per ounce range, with resistance between $2,124 per ounce and $2,140 per ounce. In terms of Indian rupees, gold has support at ₹64,580-64,350 per 10 grams and resistance at ₹64,980-65,240 per 10 grams,” Kalantri said.

Colin Shah, MD of Kama Jewelry, reflects on the performance of gold during February 2024, emphasising the sustained momentum witnessed during the month.

The surge in the last week of February, influenced by global factors such as US Fed rates, has set the stage for further escalation.

With gold prices hovering around ₹62,000 per 10 grams, Shah predicts a gradual progression, possibly crossing the ₹70,000 per 10 grams mark by year-end.

The anticipation of US rate cuts, aiming for a 4% bracket by year-end, fuels Shah’s optimism.

He foresees gold prices remaining bullish throughout the year, driven by global economic events, consumption demands, and a strong domestic market where gold is considered a reliable investment asset class.

As per Manav Modi, Analyst, Commodity and Currency at MOFSL, US labour market data scheduled this week could further increase gains for bullions.

As investors navigate these uncertain times, the performance of gold, coupled with expert opinions, suggests that the precious metal remains a valuable hedge against economic uncertainties and market fluctuations.

Gold acts as a hedge or protection against equity market volatility. Experts generally suggest individuals have 5-10% of their portfolio in gold.

However, it is essential for investors to carefully consider their risk tolerance and market dynamics before making investment decisions in this volatile environment.

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

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Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

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KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

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index Price Change
nifty 50 ₹16,986.00 -72.15
sensex ₹1,882.60 +28.30
nifty IT ₹2,206.80 +30.85
nifty bank ₹1,318.95 -14.95
index Price Change
nifty 50 ₹16,986.00 -7.15
sensex ₹1,882.60 +8.30
nifty IT ₹2,206.80 +3.85
nifty bank ₹1,318.95 -1.95
index Price Change
nifty 50 ₹16,986.00 -72.15
sensex ₹1,882.60 +28.30
nifty IT ₹2,206.80 +30.85
nifty bank ₹1,318.95 -14.95
index Price Change
nifty 50 ₹16,986.00 -7.15
sensex ₹1,882.60 +8.30
nifty IT ₹2,206.80 +3.85
nifty bank ₹1,318.95 -1.95
index Price Change
nifty 50 ₹16,986.00 -7.15
sensex ₹1,882.60 +8.30
nifty IT ₹2,206.80 +3.85
nifty bank ₹1,318.95 -1.95

Currency

Company Price Chng %Chng
Dollar-Rupee 73.3500 0.0000 0.00
Euro-Rupee 89.0980 0.0100 0.01
Pound-Rupee 103.6360 -0.0750 -0.07
Rupee-100 Yen 0.6734 -0.0003 -0.05
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Final series of Sovereign Gold Bond 2023-24 open now: A look at returns and ways to invest

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

 Listen to the Article (6 Minutes)

Summary

SGBs are government securities linked to gold grams, providing an alternative to physically holding the precious metal. Investors purchase these bonds at the issue price in cash, and upon maturity, they are redeemed in cash.

Investors keen on diversifying their portfolios with gold-backed securities must be flocking to subscribe to the fourth tranche (IVth) of the Sovereign Gold Bond (SGB) scheme for the financial year 2023-24. The subscription window is open until February 16, offering last chance for investors to participate in this financial year’s SGB offering.

The issue price for the bonds has been fixed at ₹6,263 per gram of gold.

However, online subscribers get a discounted rate of ₹50 per gram, making their investment cost ₹6,213 per gram.

The issuance of these bonds is scheduled for February 21.

Price history and returns

The price history of SGB for FY 2023-24 is as follows:

Series

Month

Price per gram

Series 1

June 2023

₹5,926

Series 2

September 2023

₹5,923

Series 3

December 2023

₹6,199

(Source: Cleartax)

Comparatively, the previous financial year (2022-23) showcased the following price trends:

Series

Month

Price per gram

Series 1

June 2022

₹5,041

Series 2

August 2022

₹5,091

Series 3

December 2022

₹5,409

Series 4

March 2023

₹5,611

(Source: Cleartax)

According to Paytm Money data as of December 18, 2023, returns for the some of the SGB tranches are as follows:

Tranche Year Returns till Dec 18 Annualised returns
Series 1 2023-24 4.60% 9.80%
Series 2 2023-24 3.90% 16.90%
Series 4 2022-23 9.90% 13.20%
Series 3 2022-23 19.10% 14.40%

It’s crucial to note that SGBs have an eight-year maturity period. It provides investors with a secure and sovereign-backed option.

SGBs distinguish themselves from physical gold as they offer potential price appreciation and generate income through interest payouts.

Investors receive a 2.5% interest rate, making SGBs a compelling choice for those seeking a combination of steady returns and exposure to the gold market.

Experts recommend SGBs for gold-oriented investments or individuals interested in a Systematic Investment Plan (SIP).

The bonds cater to both larger investors, allowing substantial investments up to 4 kgs, and retail investors, who can start with as little as 1 gram.

Nish Bhatt, Founder & CEO of Millwood Kane International, emphasised the security and historical performance of SGBs.

He said, “If we look at 2023 alone, despite geopolitical tension, a weaker dollar, and being volatile, gold is currently traded close to its lifetime high price of ₹62,240 offering approximately 11.95% return in 2024 already. If we look at the long-term, its price has more than doubled in the last 10 years. The SGB scheme is an ideal investment opportunity for investors willing to hold on to their investments to seek capital appreciation in the long run.”

Colin Shah, MD of Kama Jewelry, anticipated significant interest in the current tranche, citing the attractive benefits and returns.

He noted that as the Indian economy navigates challenges, SGBs provide a safe investment option against uncertainties.

Ways to buy SGBs

Investors can buy gold bonds from commercial banks. They can visit a bank branch or designated post office physically and fill out the form along with units and submit it along with a Cheque or DD to make payment.

Investors can also buy gold bonds from Stock Holding Corporation of India Limited (SHCIL) and recognised stock exchanges.

Online investors can even buy via net banking or through mobile application of the bank.

Additionally, SGBs are available via RBI’s retail direct website

Moreover, investors can explore primary issuances in the secondary market beyond the subscription window.

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

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KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

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index Price Change
nifty 50 ₹16,986.00 -72.15
sensex ₹1,882.60 +28.30
nifty IT ₹2,206.80 +30.85
nifty bank ₹1,318.95 -14.95
index Price Change
nifty 50 ₹16,986.00 -7.15
sensex ₹1,882.60 +8.30
nifty IT ₹2,206.80 +3.85
nifty bank ₹1,318.95 -1.95
index Price Change
nifty 50 ₹16,986.00 -72.15
sensex ₹1,882.60 +28.30
nifty IT ₹2,206.80 +30.85
nifty bank ₹1,318.95 -14.95
index Price Change
nifty 50 ₹16,986.00 -7.15
sensex ₹1,882.60 +8.30
nifty IT ₹2,206.80 +3.85
nifty bank ₹1,318.95 -1.95
index Price Change
nifty 50 ₹16,986.00 -7.15
sensex ₹1,882.60 +8.30
nifty IT ₹2,206.80 +3.85
nifty bank ₹1,318.95 -1.95

Currency

Company Price Chng %Chng
Dollar-Rupee 73.3500 0.0000 0.00
Euro-Rupee 89.0980 0.0100 0.01
Pound-Rupee 103.6360 -0.0750 -0.07
Rupee-100 Yen 0.6734 -0.0003 -0.05
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You can redeem Sovereign Gold Bond 2018-19 Series VI at 88% profit

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

 Listen to the Article (6 Minutes)

Summary

The redemption price of SGB is based on the simple average of the closing gold price of 999 purity of the previous three business days from the date of redemption as published by the India Bullion and Jewellers Association (IBJA).

The Reserve Bank of India (RBI) has announced the redemption price for sovereign gold bond (SGB) Series VI of 2018-19 due on February 12, 2024. The premature redemption rate for the same is ₹6,263 per unit, which is a profit of ₹2,937 per unit and nearly 88% above the issue price. The issue price for the same was ₹3,326 per unit.

Redemption price calculation

The redemption price of SGB is based on the simple average of the closing gold price of 999 purity of the previous three business days from the date of redemption as published by the India Bullion and Jewellers Association (IBJA).

Accordingly, the redemption price for premature redemption of SGB Series VI of 2018-19 is based on the simple average of closing gold price for February 7, 2024, February 8, 2024 and February 9, 2024.

SGB and its early encashment

Sovereign gold bonds or SGBs are issued by the government, for which investors get a holding certificate. It comprises government securities denominated in gold wherein investors are required to pay the issue price in cash.

Though the tenor of the bond is 8 years, early encashment/redemption of the bond is allowed after the fifth year from the date of issue on coupon payment dates.

Ways to prematurely withdraw SGBs

In case of premature redemption, investors can approach the concerned bank/SHCIL offices/post office/agent thirty days before the coupon payment date.

Request for premature redemption can only be entertained if the investor approaches the concerned bank/post office at least one day before the coupon payment date, according to the Reserve Bank of India (RBI).

The proceeds are credited to the customer’s bank account provided at the time of applying for the bond.

Maturity

On maturity, these bonds are redeemed in rupees and the redemption price is based on the simple average of the closing price of gold of 999 purity of the previous three business days from the date of repayment, published by the India Bullion and Jewelers Association Limited.

The investors are advised one month before maturity regarding the ensuing maturity of the bond.

On the date of maturity, the maturity proceeds are credited to the bank account as per the details on record. In case there are changes in any details, such as account numbers, or email IDs, then the investor must inform the bank/SHCIL/PO promptly.

ALSO READ | Sovereign Gold Bond 2023-24 Series IV opens today: Should you invest?

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index Price Change
nifty 50 ₹16,986.00 -72.15
sensex ₹1,882.60 +28.30
nifty IT ₹2,206.80 +30.85
nifty bank ₹1,318.95 -14.95
index Price Change
nifty 50 ₹16,986.00 -7.15
sensex ₹1,882.60 +8.30
nifty IT ₹2,206.80 +3.85
nifty bank ₹1,318.95 -1.95
index Price Change
nifty 50 ₹16,986.00 -72.15
sensex ₹1,882.60 +28.30
nifty IT ₹2,206.80 +30.85
nifty bank ₹1,318.95 -14.95
index Price Change
nifty 50 ₹16,986.00 -7.15
sensex ₹1,882.60 +8.30
nifty IT ₹2,206.80 +3.85
nifty bank ₹1,318.95 -1.95
index Price Change
nifty 50 ₹16,986.00 -7.15
sensex ₹1,882.60 +8.30
nifty IT ₹2,206.80 +3.85
nifty bank ₹1,318.95 -1.95

Currency

Company Price Chng %Chng
Dollar-Rupee 73.3500 0.0000 0.00
Euro-Rupee 89.0980 0.0100 0.01
Pound-Rupee 103.6360 -0.0750 -0.07
Rupee-100 Yen 0.6734 -0.0003 -0.05
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Sovereign Gold Bond 2023-24 Series IV opens today: Should you invest?

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

 Listen to the Article (6 Minutes)

Summary

SGBs are government securities linked to gold grams, providing an alternative to physically holding the precious metal. Investors purchase these bonds at the issue price in cash, and upon maturity, they are redeemed in cash.

The fourth tranche (IVth) of the Sovereign Gold Bond (SGB) scheme for 2023-24 has opened for subscription on Monday, February 12, and will be available for investment until February 16. This marks the final opportunity for investors to participate in this financial year’s SGB offering.

The issue price for the bonds has been fixed at ₹6,263 per gram of gold, with online subscribers getting a discounted rate of ₹50 per gram.

This means investors opting for digital modes of payment will have to pay ₹6,213 per gram.

The issuance of these bonds is scheduled for February 21, signifying the date when the bonds will be allotted to the subscribers.

Understanding Sovereign Gold Bonds (SGBs)

SGBs are government securities linked to gold grams, providing an alternative to physically holding the precious metal. Investors purchase these bonds at the issue price in cash, and upon maturity, they are redeemed in cash.

Available through banks, designated post offices, and recognised stock exchanges, SGBs offer a means of investing in gold without the need for physical possession.

Advantages of SGB investment

Secure investment with sovereign guarantees

SGBs offer a secure investment option backed by sovereign guarantees, mitigating credit risks. The eight-year term provides stability for those willing to commit until maturity.

Income generation

Unlike physical gold, SGBs generate income through interest payouts.

Investors receive 2.5% interest along with the price appreciation, providing a combination of income and growth.

Flexible investment

SGBs are suitable for both large and retail investors.

Larger investors can commit up to 4 kgs, while retail investors can start with as little as 1 gram.

Tax benefits

Interest payouts are taxable, but capital appreciation upon maturity remains tax-exempt.

This, coupled with the exemption of capital gains tax at maturity (after 5 years), makes SGBs an attractive investment from a tax perspective, experts say.

Elimination of storage concerns

SGBs exist in dematerialised (demat) form, eliminating concerns about physical gold storage.

Gold’s historical resilience

Gold has historically proven to be a safe-haven investment during economic uncertainties, geopolitical tensions, or currency devaluations, driving significant demand.

Return expectations from the current series

Investors can expect a 2.5% annual return on their investment, leading to a return of ₹1,252.6 on an investment of ₹6,263 (per gram) until maturity.

Expert recommendations

Experts suggest an ideal portfolio allocation of 8-12% to gold for a safety net during uncertain times.

As gold prices are expected to rise further in 2024 due to high demand, the current tranche of SGBs presents a decent investment opportunity for those looking to diversify their portfolio and benefit from the unique advantages offered by Sovereign Gold Bonds.

However, it’s essential to consider any investment decision within the broader portfolio context and long-term financial goals.

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

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Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

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KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

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index Price Change
nifty 50 ₹16,986.00 -72.15
sensex ₹1,882.60 +28.30
nifty IT ₹2,206.80 +30.85
nifty bank ₹1,318.95 -14.95
index Price Change
nifty 50 ₹16,986.00 -7.15
sensex ₹1,882.60 +8.30
nifty IT ₹2,206.80 +3.85
nifty bank ₹1,318.95 -1.95
index Price Change
nifty 50 ₹16,986.00 -72.15
sensex ₹1,882.60 +28.30
nifty IT ₹2,206.80 +30.85
nifty bank ₹1,318.95 -14.95
index Price Change
nifty 50 ₹16,986.00 -7.15
sensex ₹1,882.60 +8.30
nifty IT ₹2,206.80 +3.85
nifty bank ₹1,318.95 -1.95
index Price Change
nifty 50 ₹16,986.00 -7.15
sensex ₹1,882.60 +8.30
nifty IT ₹2,206.80 +3.85
nifty bank ₹1,318.95 -1.95

Currency

Company Price Chng %Chng
Dollar-Rupee 73.3500 0.0000 0.00
Euro-Rupee 89.0980 0.0100 0.01
Pound-Rupee 103.6360 -0.0750 -0.07
Rupee-100 Yen 0.6734 -0.0003 -0.05
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Sovereign Gold Bonds 2023-24 series IV priced at ₹6,263 per gram, issue to open on Monday

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

 Listen to the Article (6 Minutes)

Summary

The Government of India, in collaboration with the RBI, has decided to offer a discount of ₹50 per gram less than the nominal value for investors applying online and making payments through digital modes.

The Reserve Bank of India (RBI) has fixed the issue price for the Sovereign Gold Bonds (2023-24 Series IV) at ₹6,263 per gram, according to an official statement released on Friday. The bonds are set to open for subscription for five trading days, from February 12 to February 16, 2024.

The nominal value of the bond is calculated based on the simple average of the closing price published by the India Bullion and Jewellers Association (IBJA) for gold of 999 purity in the last three working days of the week preceding the subscription period, i.e., February 07, February 08, and February 09, 2024.

The Government of India, in collaboration with the RBI, has decided to offer a discount of ₹50 per gram less than the nominal value for investors applying online and making payments through digital modes.

For these investors, the issue price of the Sovereign Gold Bond will be ₹6,213 per gram.

Abhijit Roy, CEO of GoldenPi, highlighted the appeal of Sovereign Gold Bonds (SGBs) for investors seeking to include gold in their portfolios.

SGBs come with an 8-year maturity period and a 5-year lock-in period, providing investors with flexibility. The bonds also offer an annual interest rate of 2.50%, ensuring a steady stream of fixed income.

“Investors can enjoy tax breaks when redeeming SGBs, but capital gains from selling SGBs on the secondary market are subject to prevailing market rates. Additionally, the interest on SGBs is taxed at the individual’s applicable tax rate,” Roy said.

Unlike physical gold, SGBs eliminate the need for storage and offer significant tax efficiency advantages. Physical gold requires a three-year holding period for capital gains treatment, while SGBs provide a more tax-friendly option.

The SGBs are sold through scheduled commercial banks (except small finance banks, payment banks, and regional rural banks), Stock Holding Corporation of India (SHCIL), Clearing Corporation of India (CCIL), designated post offices, National Stock Exchange of India and Bombay Stock Exchange.

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

 Daily Newsletter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

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Oil Fluctuates as Traders Assess China’s Vow, Unrest in Libya

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today's market

index Price Change
nifty 50 ₹16,986.00 -72.15
sensex ₹1,882.60 +28.30
nifty IT ₹2,206.80 +30.85
nifty bank ₹1,318.95 -14.95
index Price Change
nifty 50 ₹16,986.00 -7.15
sensex ₹1,882.60 +8.30
nifty IT ₹2,206.80 +3.85
nifty bank ₹1,318.95 -1.95
index Price Change
nifty 50 ₹16,986.00 -72.15
sensex ₹1,882.60 +28.30
nifty IT ₹2,206.80 +30.85
nifty bank ₹1,318.95 -14.95
index Price Change
nifty 50 ₹16,986.00 -7.15
sensex ₹1,882.60 +8.30
nifty IT ₹2,206.80 +3.85
nifty bank ₹1,318.95 -1.95
index Price Change
nifty 50 ₹16,986.00 -7.15
sensex ₹1,882.60 +8.30
nifty IT ₹2,206.80 +3.85
nifty bank ₹1,318.95 -1.95

Currency

Company Price Chng %Chng
Dollar-Rupee 73.3500 0.0000 0.00
Euro-Rupee 89.0980 0.0100 0.01
Pound-Rupee 103.6360 -0.0750 -0.07
Rupee-100 Yen 0.6734 -0.0003 -0.05
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Sovereign Gold Bonds 2016 Series I to give 101% profit at maturity: Check final redemption date

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

 Listen to the Article (6 Minutes)

Summary

Investors who navigated the eight-year journey with Sovereign Gold Bonds 2016 series 1 are set to savor the rewards of their patience and strategic investment decisions.

As the first batch of Sovereign Gold Bonds (SGB) 2016 approaches maturity on Thursday, February 8, investors who chose to retain these bonds are poised to realise substantial gains. The Reserve Bank of India (RBI) has recently announced the final redemption price at ₹6,271 per unit of SGB, reflecting the simple average closing price of gold for the week of Jan 29-Feb 2, 2024, as per the SGB scheme guidelines.

The Sovereign Gold Bonds 2016-I, with an initial issue price of ₹3,119 per gram when launched in February 2016, will yield around 101% gain for investors upon maturity.

The interest on SGB is credited semi-annually to the investor’s bank account, with the final interest payment due along with the principal at maturity.

Investors are provided with a one-month notice before the bond’s maturity, and on the maturity date, the proceeds are credited to the registered bank account.

It is crucial for investors to promptly update any changes in account details with the bank/SHCIL/PO.

Sovereign Gold Bonds offer a unique advantage, allowing investors to capitalise on gold price fluctuations without the complexities associated with physical gold transactions.

Online purchasers enjoy a ₹50 per gram discount, providing greater flexibility.

Holding SGBs until maturity in the eighth year enables a 100% capital gains exemption for those who buy them on the secondary market.

Experts say that selling the SGB before the eighth year may incur Short-Term Capital Gains (STCG) if sold within three years and 20% Long-Term Capital Gains (LTCG) if sold between three to eight years.

However, holding until maturity in the eighth year qualifies for a 100% capital gains exemption.

Meanwhile, Sovereign Gold Bonds (2023-24 Series IV) will open for subscription for five trading days, from February 12 to February 16. The price for the issue will be declared by Reserve Bank of India (RBI) soon.

The price history of SGB for FY 2023-24 is as follows:

Series

Month

Price per gram

Series 1

June 2023

₹5,926

Series 2

September 2023

₹5,923

Series 3

December 2023

₹6,199

The SGBs, categorised as Government of India Stock under the Government Securities Act, 2006, offer investors an unique avenue for gold investment.
Upon subscription, investors will be furnished with a Certificate of Holding, and these bonds can be converted into demat form.

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

 Daily Newsletter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

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Oil Fluctuates as Traders Assess China’s Vow, Unrest in Libya

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today's market

index Price Change
nifty 50 ₹16,986.00 -72.15
sensex ₹1,882.60 +28.30
nifty IT ₹2,206.80 +30.85
nifty bank ₹1,318.95 -14.95
index Price Change
nifty 50 ₹16,986.00 -7.15
sensex ₹1,882.60 +8.30
nifty IT ₹2,206.80 +3.85
nifty bank ₹1,318.95 -1.95
index Price Change
nifty 50 ₹16,986.00 -72.15
sensex ₹1,882.60 +28.30
nifty IT ₹2,206.80 +30.85
nifty bank ₹1,318.95 -14.95
index Price Change
nifty 50 ₹16,986.00 -7.15
sensex ₹1,882.60 +8.30
nifty IT ₹2,206.80 +3.85
nifty bank ₹1,318.95 -1.95
index Price Change
nifty 50 ₹16,986.00 -7.15
sensex ₹1,882.60 +8.30
nifty IT ₹2,206.80 +3.85
nifty bank ₹1,318.95 -1.95

Currency

Company Price Chng %Chng
Dollar-Rupee 73.3500 0.0000 0.00
Euro-Rupee 89.0980 0.0100 0.01
Pound-Rupee 103.6360 -0.0750 -0.07
Rupee-100 Yen 0.6734 -0.0003 -0.05
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Gold near five-week low as expectations for rate-cut ease: Should you invest?

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

 Listen to the Article (6 Minutes)

Summary

Gold prices: Spot gold, after falling to $2,001.72, its lowest point since December 13, showed a marginal recovery, edging 0.1% higher to $2,008.59 per ounce. Back home, gold futures, maturing on February 5, 2024, stood at ₹61,589 per 10 grams.

Gold prices hovered near five-week lows on Thursday, January 18, as hawkish remarks from Federal Reserve officials and robust data dampened investors’ expectations for deeper and early interest rate cuts in the United States this year. Spot gold, after falling to $2,001.72, its lowest point since December 13, showed a marginal recovery, edging 0.1% higher to $2,008.59 per ounce, according to news agency Reuters.

Back home, gold futures, maturing on February 5, 2024, stood at ₹61,589 per 10 grams.

The strengthening of the US dollar played a pivotal role in the recent downturn of gold prices, as highlighted by Brian Lan, a representative from the Singapore-based dealer Gold Silver Central. According to a Reuters report, Lan said that the dollar’s gain over the past few days has imposed pressure on gold prices.

The dollar’s ascent was further fueled by data revealing a higher-than-expected increase in US retail sales in December, maintaining the country’s economic stability as it entered the new year.

According to Chintan Mehta, CEO, Abans Holdings, a heightened sense of instability in the Red Sea region, marked by an escalation in attacks and counterattacks on the geopolitical front, has supported the demand for gold.

Additionally, investors are closely monitoring statements from Federal Reserve members, particularly Atlanta Federal Reserve President Raphael Bostic, who is expected to speak later in the day.

The outlook

Rahul Kalantri, VP Commodities, Mehta Equities believes that gold prices will remain volatile.

“The yellow metal is anticipated to find support at $2000-1988 per ounce, with resistance at $2024-2038 per ounce. In terms of rupee, gold is likely to find support at ₹61,250-61,080 per 10 grams, with resistance at ₹61,690,-₹61,840 per 10 grams.

Mehta of Abans Holdings, however, believes that gold prices may see a rally going ahead once participation expands.

“We believe that gold will consolidate at its current prices. Currently, we are observing a rally up to ₹63,500. On the downside, gold may experience a correction down to ₹61,000 levels,” he said.

Should one invest?

Mehta emphasises the importance of monitoring commodity markets during these uncertain times. He added that gold remains an attractive investment opportunity despite the recent dip.

Lan further added that it’s time to make a profit by investing in the yellow metal.

“The year has just started, and probably a lot of investors think that prices are not going any higher, so it’s time to secure gains. It’s a usual market cycle from what we see,” he was quoted as saying by Reuters.

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

 Daily Newsletter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Previous Article

Oil Fluctuates as Traders Assess China’s Vow, Unrest in Libya

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today's market

index Price Change
nifty 50 ₹16,986.00 -72.15
sensex ₹1,882.60 +28.30
nifty IT ₹2,206.80 +30.85
nifty bank ₹1,318.95 -14.95
index Price Change
nifty 50 ₹16,986.00 -7.15
sensex ₹1,882.60 +8.30
nifty IT ₹2,206.80 +3.85
nifty bank ₹1,318.95 -1.95
index Price Change
nifty 50 ₹16,986.00 -72.15
sensex ₹1,882.60 +28.30
nifty IT ₹2,206.80 +30.85
nifty bank ₹1,318.95 -14.95
index Price Change
nifty 50 ₹16,986.00 -7.15
sensex ₹1,882.60 +8.30
nifty IT ₹2,206.80 +3.85
nifty bank ₹1,318.95 -1.95
index Price Change
nifty 50 ₹16,986.00 -7.15
sensex ₹1,882.60 +8.30
nifty IT ₹2,206.80 +3.85
nifty bank ₹1,318.95 -1.95

Currency

Company Price Chng %Chng
Dollar-Rupee 73.3500 0.0000 0.00
Euro-Rupee 89.0980 0.0100 0.01
Pound-Rupee 103.6360 -0.0750 -0.07
Rupee-100 Yen 0.6734 -0.0003 -0.05
Quiz
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What coins do you think will be valuable over next 3 years?

Answer Anonymously

Should Elon Musk be able to buy Twitter?