Sovereign Gold Bond Schemes 2023-24: Two New Opportunities For Gold Investment

The Reserve Bank of India (RBI) is set to launch two more divisions of the Sovereign Gold Bond Scheme 2023-24, offering investors a secure and profitable avenue to invest in gold. This latest update provides key details about the upcoming Series III and IV, including subscription dates, interest rates, and tenures.
Series III
Subscription Dates: December 18-22, 2023
Issue Date: December 28, 2023
Interest Rate: 2.50% p.a. payable semi-annually
Tenure: 8 years with an exit option after 5 years
Issue Price: Rs. 5,923 per gram of gold
Minimum Subscription: 1 gram
Maximum Subscription: 4 kg for individuals and 20 kg for institutions
Series IV
Subscription Dates: January 29-February 2, 2024
Issue Date: February 8, 2024
Interest Rate: 2.50% p.a. payable semi-annually
Tenure: 8 years with an exit option after 5 years
Issue Price: To be announced closer to the subscription date
Minimum Subscription: 1 gram
Maximum Subscription: 4 kg for individuals and 20 kg for institutions
Investing in Sovereign Gold Bonds offers several benefits, including:
Safe and secure investment backed by the Government of India.
Attractive interest rate of 2.50% p.a. in addition to capital appreciation.
Hedge against inflation and market fluctuations.
Convenient investment with online and offline purchase options.
Tax benefits on capital gains and interest earned.

For investors seeking a secure and profitable way to invest in gold, the Sovereign Gold Bond Scheme 2023-24 is a compelling option. Both Series III and IV offer attractive interest rates, flexible tenures, and convenient investment options.

The Sovereign Gold Bond (SGB) 2023-24 Series III subscription window opens from December 18th to 22nd, with issuance scheduled for December 28th.

The subscription period for the Sovereign Gold Bond (SGB) 2023-24 Series IV runs from February 12th to 16th, 2024, with issuance occurring on February 21st, 2024.

Investing in Sovereign Gold Bonds (SGBs): Series III and IV Key Points
Before investing in the upcoming Series III and IV Sovereign Gold Bond (SGB) schemes, remember these key pointers:

Open only to resident individuals, Hindu Undivided Families (HUFs), Trusts, Universities, and Charitable Institutions.
Denomination and Unit:
Available in multiples of grams of gold, with a minimum unit of 1 gram.
Tenure and Redemption:
Eight-year tenure with an option for premature redemption after the 5th year, on interest payment dates.
Investment Limits:
Minimum investment: 1 gram of gold.
Maximum investment:
Individuals: 4 kg per fiscal year (April-March).
HUFs: 4 kg per fiscal year.
Trusts and similar entities: 20 kg per fiscal year.
The annual ceiling includes SGBs subscribed across different tranches and those purchased from the secondary market during the fiscal year.
A self-declaration confirming adherence to the annual ceiling will be required at the time of application.
Joint Holding and Investment Limit:
In the case of joint holdings, the 4 kg investment limit applies only to the first applicant.
Price and Discount:
The SGB price is set in Indian Rupees based on the average closing gold price (999 purity) published by the IBJA for the three working days preceding the subscription period.
Online investors who pay digitally get Rs. 50 per gram discount on the issue price.
Payment Options:
Payment options include:
Cash (up to Rs. 20,000)
Demand draft
Electronic banking
The SGBs will be issued as Government of India Stock under the Government Securities Act, 2006. The investors will be issued a Certificate of Holding for the same. The SGBs will be eligible for conversion into demat form.

The saving price will be in Indian Rupees based on a simple average of the closing price of gold of 999 purity, of the previous three working days published by IBJA Ltd.

SGBs will be sold through Scheduled Commercial banks (except Small Finance Banks, Payment Banks and Regional Rural Banks), Stock Holding Corporation of India Limited (SHCIL), Clearing Corporation of India Limited (CCIL), designated post offices (as may be notified) and recognised stock exchanges viz., National Stock Exchange of India Limited and Bombay Stock Exchange Limited, either directly or through agents.
Interest Payment:
Investors receive a fixed interest rate of 2.50% per annum, paid semi-annually on the nominal value of their investment.
Loan Collateral:
SGBs can be used as collateral for loans, with the loan-to-value ratio (LTV) determined by the Reserve Bank's guidelines for gold loans.
Indexation Benefits:
Long-term capital gains arising from the transfer of SGBs are eligible for indexation benefits, reducing tax liabilities.
SGBs can be traded on designated stock exchanges, offering additional liquidity to investors.
SGBs and Statutory Liquidity Ratio (SLR):The Reserve Bank of India has announced that SGBs acquired by banks through lien, hypothecation, or pledge processes alone will now be counted towards their Statutory Liquidity Ratio (SLR) requirements. This policy change aims to encourage banks to hold more SGBs and facilitate wider distribution of these instruments.
Distribution Commission for SGBs:
The commission for distribution of SGBs will be paid at a rate of 1% of the total subscription amount received by the designated receiving offices. These offices are required to share at least 50% of this commission with the agents or sub-agents who facilitated the SGB subscriptions. This incentivizes agents and sub-agents to actively promote and distribute SGBs, further expanding their reach and accessibility.