Tag: Sovereign Gold Bond

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)

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

Sovereign Gold Bonds: RBI announces premature redemption dates for April-September 2024

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

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The Reserve Bank of India (RBI) has released details regarding the premature redemption of Sovereign Gold Bond (SGB) tranches scheduled for the period of April 2024 to September 2024. The central bank has provided a window for investors to submit requests for premature redemption, along with important dates for coupon payments.

As outlined in the Consolidated Procedural Guidelines on the Sovereign Gold Bond (SGB) Scheme, premature redemption is permissible after five years from the date of issue of the bonds.

The details of tranches due for premature redemption and the associated window for submission of redemption requests are as follows:

(Source: RBI)

Investors should take note that the mentioned dates are subject to change in case of unscheduled holidays, RBI stated.

In the event of early encashment or redemption, investors can approach the concerned bank, SHCIL offices, post office, or agent thirty days before the coupon payment date.

It is crucial to submit the request at least one day before the coupon payment date for the premature redemption to be entertained.

Sovereign Gold Bonds are government securities denominated in gold, issued by the government, and come with a holding certificate for investors.

While the bond has a tenor of 8 years, premature redemption is allowed after the fifth year from the date of issue on coupon payment dates.

In case of successful premature redemption, the proceeds are credited to the customer’s bank account provided at the time of applying for the bond, as per the guidelines set by the Reserve Bank of India.

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

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)

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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:

(Source: Cleartax)

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

(Source: Cleartax)

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

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.

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

You can redeem Sovereign Gold Bond 2018-19 Series VI at 88% profit

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

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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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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

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

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

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

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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.

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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

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

From new NPS rules to final tranche of Sovereign Gold Bonds 2023-24 — here are key changes slated for February

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

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February 2024 is poised to usher in changes in the personal finance landscape. Several regulatory authorities have unveiled key updates and amendments, each carrying implications for investors, account holders, and individuals engaging in financial transactions.

Take a look at the key changes to take place in February 2024:

NPS new partial withdrawal rules

The Pension Fund Regulatory and Development Authority (PFRDA) has rolled out a new circular outlining provisions for the withdrawal of pensions under the National Pension System (NPS). According to this, subscribers can withdraw no more than 25% of their contributions from their pension accounts, excluding the employer’s contribution.

Additionally, partial withdrawals are permitted for certain purposes only.

The partial withdrawal amount should not exceed one-fourth of the subscriber’s total contributions in their pension account.

These rules will be effective from February 1, 2024.

IMPS new money transfer rule

Effective February 1, 2024, customers will likely be able to transfer up to ₹5 lakh between bank accounts without adding beneficiary details using the Immediate Payment Service (IMPS).

According to the National Payments Corporation of India (NPCI) circular, dated October 31, 2023, all members are required to comply with the directive for initiating and accepting fund transfers via mobile number + bank name on all IMPS channels by January 31, 2024.

This indicates a shift, as users will soon be able to transfer up to ₹5 lakh using IMPS without inputting recipient details such as mobile numbers, bank account names, account numbers, or IFSC codes.

Sovereign Gold Bond (SGB) 2023-24 Series 4 issue

The Reserve Bank of India (RBI) will issue the final tranche of Sovereign Gold Bonds (SGBs) in the 2023-24 series in February 2024.

The same will open on February 12, 2024, and close on February 16, 2024.

FASTags KYC new ruling

The National Highway Authority of India (NHAI) has declared that after January 31, all FASTags lacking complete Know Your Customer (KYC) information will face deactivation or blacklisting by the issuing banks.

Consequently, users are urged to ensure the completion of KYC for their most recent FASTag by February 1.

The ‘One Vehicle, One FASTag’ initiative was launched to discourage the use of a single FASTag for multiple vehicles or multiple FASTags for a single vehicle.

New fee introduction, no rent rewards on ICICI Bank credit cards

ICICI Bank will introduce significant changes to the features and charges associated with its credit cards starting February 1, 2024. This includes the implementation of a Dynamic Currency Conversion (DCC) fee, changes in reward points on rent payments and e-wallet loading and expansion of utility payments for reward points.

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

Sovereign Gold Bond 2023-24 Series III: Steps to buy SGB online via net banking

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

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The third tranche of the Sovereign Gold Bond (SGB) scheme for 2023-24 opened for subscription on December 18. The same will be available till December 22. The issuance of the bond will take place on December 28. Banks across the nation offer the option of buying it online.

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

Sovereign Gold Bond 2023-24 Series III opens today: Should you invest?

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

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The third tranche (IIIrd) of the Sovereign Gold Bond (SGB) scheme for 2023-24 has opened for subscription on Monday and will be available till December 22. The issue price for the same has been fixed at ₹6,199 per gram of yellow metal. Online subscribers can, however, secure these bonds at a discount of ₹50 per gram.

The issuance of these bonds, scheduled for December 28, 2023, arrives against the backdrop of gold prices surging over 10% in 2023.

Despite this surge, the question remains: Is this series a viable investment choice?

Understanding Sovereign Gold Bond (SGBs):

SGBs, essentially government securities linked to gold grams, offer 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 provide a means of investing in gold without the necessity of physical possession.

Why consider investment?

For those willing to commit until maturity (an eight-year term), SGBs offer a secure investment option backed by sovereign guarantees, mitigating credit risks.

Unlike physical gold, SGBs generate income through interest payouts. It pays interest of 2.5% along with the price appreciation which no other gold investment offers.

Experts advocate SGBs for gold-oriented investments or those interested in a Systematic Investment Plan (SIP). The bonds accommodate substantial investments up to 4 kgs for larger investors, while retail investors can start with as little as 1 gram.

Suresh Shukla, Chief Business Officer at SBI Securities, highlighted, “The upcoming SGB presents a compelling investment opportunity… without the challenges of physical storage.”

Tax implications also favor SGB investors, with interest payouts being taxable while capital appreciation upon maturity remains tax-exempt.

Additionally, SGBs eliminate concerns about physical gold storage, existing in dematerialised (demat) form.

Here’s a look at how SGB performed since the start of FY22:

(Source: RBI)

The above data has used price of SGB for the first issue of FY24 as the benchmark price to calculate returns. The above table shows that had an investor bought gold bonds in any of the tranches in the last 14 issues in FY21 and FY22, he/she would be sitting on profits.

Portfolio diversification

Gold’s historical resilience during economic flux, geopolitical uncertainties, or currency devaluations elevates its status as a safe-haven investment, thereby driving significant demand.

As the global economy grapples with geopolitical tensions, gold retains its appeal as a hedge against uncertainty.

However, while gold offers stability, it’s crucial to view any investment decision within the broader portfolio context and long-term financial goals.

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

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

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

You can redeem Sovereign Gold Bond 2017-18 Series X at 112% profit: Check due date

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

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The Reserve Bank of India (RBI) has announced the redemption price for sovereign gold bond (SGB) Series X of 2017-18 due on December 4, 2023. The premature redemption rate for the same is ₹6,265 per unit, which is a profit of ₹3,304 per unit and nearly 111.58% above the issue price. The issue price for the same was ₹2,961 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 X of 2017-18 is based on the simple average of closing gold price for November 29, 30 and December 1, 2023.

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.

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

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

India’s first sovereign gold bonds to net investors 128% returns over 8 years

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

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The Reserve Bank of India (RBI) has announced the final redemption price for the first tranche of the Sovereign Gold Bond (SGB). The SGB 2015-I tranche, initiated in 2015, is due for redemption on November 30, 2023.

The final redemption price would be ₹6,132 per unit of SGB, which is determined by using the simple average closing price of gold for the week of November 20–24, 2023, according to a recent RBI notification.

According to the SGB scheme guidelines, “The redemption price shall be fixed in Indian Rupees on the basis of the previous week’s (Monday – Friday) simple average closing price for gold of 999 purity, published by India Bullion and Jewellers Association (IBJA).”

The first tranche was issued at a price of ₹2,684 per gram in 2015. In the SGB scheme, the gold bonds are repayable on the expiration of eight years from the date of the issue of the gold bonds.

How to buy Sovereign Gold Bonds online

Investment in the Sovereign Gold Bonds (SGB) is only permitted to resident Indian entities, including as individuals, HUFs, Trusts, Universities, and charitable organisations. Investors can buy SGB online through SBI, HDFC Bank, PNB, Canara Bank, ICICI Bank, among other banks.

For investors applying online and paying against the application using the digital method, the issue price of the Gold Bonds will be ₹50 per gram less than the nominal value. The bonds will be denominated in units of one gram of gold and multiples thereof.

SGBs are government securities denominated in grams of gold. They were launched to reduce the demand for physical gold by providing an alternative investment instrument linked to gold. The bonds were sold through scheduled commercial banks and designated post offices.

Interest rate

The investors will be compensated at a fixed rate of 2.50% per annum payable semi-annually on the nominal value.

Tax treatment

The interest on SGBs shall be taxable as per the provision of Income Tax Act, 1961 (43 of 1961). Capital gains tax arising on redemption of SGB to an individual is exempted. The indexation benefits will be provided to long-term capital gains arising to any person on transfer of the SGB.

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

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