Sovereign Gold Bond (SGB) Scheme: Govt launches Series IV 2022-23, subscription open till March 10

Sovereign Gold Bond Scheme: The Reserve Bank of India (RBI) will launch the Series IV of its Sovereign Gold Bond Scheme 2022-23 on March 6 (Monday) for a subscription. This would be the last tranche for this fiscal. The subscription of this will be available till March 10. SGBs, or Sovereign Gold Bonds, are issued by the Reserve Bank of India (RBI) on behalf of the Centre as an alternative to buying physical gold.  

The RBI has fixed an issue price of Rs 5,611 per gram of gold. In comparison, the RBI offered the issue price of Rs 5,409 per gram in December 2022.  

Issue price, subscription & interest 

The RBI in a statement said that the issue price has been fixed to  Rs 5,611 per gram of gold after considering the simple average of the closing price of March 1, March 2, and March 03. 

“The nominal value of the bond based on the simple average of closing price [published by the India Bullion and Jewellers Association Ltd (IBJA)] for gold of 999 purity of the last three working days of the week preceding the subscription period, i.e. March 01, March 02, and March 03, 2023, works out to ₹5,611 per gram of gold," the RBI said in a statement issued on March 3.  

The interest rate offered on these bonds is 2.50 per cent per annum on the amount of initial investment which investors pay to buy the bond. SGBs will be denominated in multiples of gram(s) of gold with a basic unit of one gram. 

It also offers a discount of Rs 50 to those investors who bid through digital mode or apply online. 

The lock-in period for SGB is 8 years. There is an exit option available in the fifth year, which can be used on interest payment days. 

The investors will be issued a Certificate of Holding for the same. The SGBs will be eligible for conversion into demat form. 

SGBs can be used as collateral for loans. The loan-to-value (LTV) ratio will be applicable to any general gold loan available in the market, mandated by the Reserve Bank of India from time to time. 

Also see: Sovereign Gold Bond scheme opens for subscription. Check details here

Who can invest in Sovereign Gold Bond Scheme? 

All Indians can invest in Sovereign Gold Bond Scheme 2022-23. Investors should buy a minimum of one gram of gold to invest in the SGB scheme.  

The maximum limit of subscription is 4 kg for individuals, 4 kg for Hindu Undivided Families (HUF). For trusts and similar entities, the maximum limit is 20 kg this fiscal. The government can revise this limit from time to time. 

Discount on Sovereign Gold Bond Scheme 

Investors should note that though the RBI has fixed the issue at Rs 5,611 per gram, subscribers can get a discount if they apply online and make digital payments.  

They can avail Rs 50 per gram discount on the bond. So, if you are applying online and buying one gram of gold through SGB, then you will have to pay Rs 5,561 through UPI or other digital payment modes instead of Rs 5,611.

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How can you buy Sovereign Gold Bonds?  

Investors can buy Sovereign Gold Bonds from authorised post offices, Scheduled Commercial Banks, Stock Holding Corporation of India Limited (SHCIL), Clearing Corporation of India Limited (CCIL), and stock exchanges NSE and BSE.   

How can you make the payments? 

If investors make the investment online, they can pay through UPI.  

For physical purchases of SGBs, the payment can be made through cash payment (up to a maximum of Rs 20,000) or demand draft or cheque. 

Also read: 8 points on how Sovereign Green Bonds will be different from government bonds