What is sovereign gold bond in simple terms?

Sovereign Gold Bonds (SGB) are government securities denominated in gold. The bonds are issued by the Reserve Bank of India on the government’s behalf. Hence these gold bonds will be a good substitute for physical gold. The purchase and redemption upon maturity both happen in terms of cash and not gold.

What is sovereign gold bond and how it works?

What is Sovereign Gold Bond (SGB)? SGBs 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.

What is the benefit of gold sovereign bond?

Firstly, these gold bonds allow you to get a lower price than physical gold when applied online. Secondly, you get a fixed interest rate on these gold bonds. Thirdly, gold bonds have no holding or storage cost. Fourth, these bonds carry a sovereign guarantee since they are issued by the government.

What is the price of sovereign gold Bond?

The government, in consultation with the Reserve Bank of India (RBI), has decided to allow a discount of Rs 50 per gram from the issue price to investors who apply online and make payments through digital mode. For such investors, the issue price of gold bonds will be Rs 4,741 per gram of gold.

What is sovereign gold bond interest rate?

Interest rate. The investors will be compensated at a fixed rate of 2.50 percent per annum payable semi-annually on the nominal value. 15. Collateral. Bonds can be used as collateral for loans.

Is Sovereign gold bond available now?

The subscription of the latest tranche of sovereign gold bonds ends today. The issue had opened on October 25. The issue price has been fixed at ₹4,761 per gram of gold. The Reserve Bank of India will issue the bonds on behalf of the Government of India.

What is the price of Sovereign gold bond?

Is Sovereign gold bond open now?

The Sovereign Gold Bond Scheme (SGB) 2021-22 – Series VIII will be open for subscription for five days starting today, November 29. works out to ₹4,791 per gram of gold,” the RBI said.