Sovereign Gold Bonds 2023-24 Series-IV: Last day to apply

Today is the final day for investors to participate in RBI's Sovereign Gold Bond Scheme 2023-24 – Series IV as the subscription period draws to a close.

Investors had a five-day window, starting from February 12, 2024, to subscribe to this series. The issue price for this tranche has been fixed at ₹6,263 per gram. However, investors making online payments can enjoy a discount of ₹50 per gram, effectively reducing the issue price to ₹6,213. Upon subscription, investors can expect to receive their Sovereign Gold Bonds in their demat accounts by February 21, 2024.

1. What is a Sovereign Gold Bond (SGB)? Who is the issuer? 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 the Reserve Bank on behalf of the Government of India.

2. Why should I buy SGB rather than physical gold? What are the benefits? The quantity of gold for which the investor pays is protected, since he receives the ongoing market price at the time of redemption/ premature redemption. The SGB offers a superior alternative to holding gold in physical form. The risks and costs of storage are eliminated. Investors are assured of the market value of gold at the time of maturity and periodical interest. SGB is free from issues like making charges and purity in the case of gold in jewellery form. The bonds are held in the books of the RBI or in demat form eliminating risk of loss of scrip etc.

3. Are there any risks in investing in SGBs? There may be a risk of capital loss if the market price of gold declines. However, the investor does not lose in terms of the units of gold which he has paid for.

4. Who is eligible to invest in the SGBs? Persons resident in India as defined under Foreign Exchange Management Act, 1999 are eligible to invest in SGB. Eligible investors include individuals, HUFs, trusts, universities and charitable institutions. Individual investors with subsequent change in residential status from resident to non-resident may continue to hold SGB till early redemption/maturity.