Sovereign Gold Bond Scheme 2020-21 series VI opens today: How to apply, price, eligibility and more

New Delhi: The Sovereign Gold Bond Scheme 2020-21 series VI will open for subscription on Monday (August 31, 2020), and close on September 4, 2020.

The issue price for the sixth tranche of the Sovereign Gold Bond Scheme has been fixed at Rs 5,117 per gram, the RBI said in a statement.

The issue price for the bonds (series V), which were open for subscription from August 3 to August 7, was Rs 5,334 per gram of gold. 

The sovereign gold bond scheme was launched in November 2015 with an objective to reduce the demand for physical gold and shift a part of the domestic savings, used for the purchase of gold, into financial savings. The RBI issued 10 tranches of Sovereign Gold Bonds (SGBs) for an aggregate amount of Rs 2,316.37 crore (6.13 tonnes) during 2019-20. 

Here’s all you need to know about your eligibility, how to apply for the Sovereign Gold Bond Scheme.

What is Sovereign Gold Bond Scheme?

Sovereign Gold Bond Scheme are government securities denominated in grams of gold. They are substitutes for holding physical gold. Investors have to pay the issue price in cash and the bonds will be redeemed in cash on maturity. The Bond is issued by Reserve Bank on behalf of Government of India.

How will the Sovereign Gold Bond Scheme be sold?

The bonds will be sold through scheduled commercial banks (except Small Finance Banks and Payment Banks), Stock Holding Corporation of India Limited (SHCIL), designated post offices, and recognised stock exchanges viz., National Stock Exchange of India Limited and Bombay Stock Exchange Limited.

Who can buy Sovereign Gold Bond Scheme?

The Bonds will be restricted for sale to resident individuals, HUFs, Trusts, Universities and Charitable Institutions.

What will be the tenor of the Sovereign Gold Bond Scheme?

The tenor of the Bond will be for a period of 8 years with exit option after 5th year to be exercised on the interest payment dates.

What is the investment limit of the Sovereign Gold Bond Scheme?

Minimum permissible investment will be 1 gram of gold. The maximum limit of subscribed shall be 4 KG for individual, 4 Kg for HUF and 20 Kg for trusts and similar entities per fiscal (April-March) notified by the Government from time to time. A self-declaration to this effect will be obtained. The annual ceiling will include bonds subscribed under different tranches during initial issuance by Government and those purchased from the Secondary Market.

Issue price and online price of Gold Bond

The nominal value of the bond based on the simple average closing price [published by the India Bullion and Jewellers Association Ltd (IBJA)] for gold of 999 purity of the last three business days of the week preceding the subscription period, i.e. Aug 26 – Aug 28, 2020 works out to Rs 5,117 (Rupees five thousand one hundred and seventeen only) per gram of gold, an RBI circular said.

Government of India, in consultation with the Reserve Bank of India, has decided to offer a discount of Rs 50 per gram less than the nominal value to those investors applying online and the payment against the application is made through digital mode. For such investors, the issue price of Gold Bond will be Rs 5,067 (Rupees five thousand and sixty seven only) per gram of gold. Investors who apply online and the payment against the application is made through digital mode will get it at Rs 50 per gram less than the nominal value. For such investors, the issue price of Gold Bond will be Rs 5,284 (Rupees five thousand two hundred and eighty four only) per gram of gold.