Home Finance Sovereign Gold Bond-2021-22 – How and when to buy?

Sovereign Gold Bond-2021-22 – How and when to buy?

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Sovereign Gold Bond Scheme 2021-22 has been released. Sovereign Gold Bond is backed by the Government of India. It is one of the best options to invest in gold.

Gold price history shows that gold is becoming a valuable asset every year. In the year 2020, the price of 10 grams of gold is Rs. 57300. If the current trend continues, then in the next 10 years the price of gold may reach 1 lakh per 10 grams. So it is wise to invest in gold. There are many options to invest in gold like Gold ETFs, Physical Gold and Sovereign Gold Bonds. The key features, benefits and method of investing in Sovereign Gold Bond (SGB) are mentioned below.

Sovereign Gold Bond Scheme-2021-22 – Key Features

element The SBG period for the bond will be 8 years. The lock-in period will be 5 years. Investors can exit gold bonds after 5th, 6th and 7thth year of interest payment. The investor needs to choose the option to exit the gold bond.

interest payment In Gold Bond, the investor will get additional interest amount every year. The interest rate has been set by the government at 2.5%. The interest amount is payable after every six months.

Return – You will get returns on Gold Bonds which is equal to the price of Gold. The calculation will be based on the average closing price of 999 purity gold in the last three working days.

denomination – Gold bond denomination starts from 1 unit. 1 unit is equal to 1 gram of gold. The minimum investment in Gold Bond is equal to 1 gram. The maximum investment value is 4 kg for individual and HUF and 20 kg for trusts and similar entities.

taxability Since gold bond returns are divided into two parts, interest amount and redemption amount. This means that the taxability on gold bonds is also divided into two parts.

The interest earned during the financial year is added to the annual income of the investor and taxed as per the applicable tax slab. If the investor is holding the bond till the maturity of 8 years, then capital gains tax is not applicable on the maturity amount.

Benefits of Sovereign Gold Bond

Investing in Gold Bonds gives the following benefits.

  • Sovereign Gold Bond is backed by the government and it is absolutely safe to invest in SGB. There is no risk associated with gold bonds except market risk.
  • You can earn additional fixed interest of 2.5% on the issue price. This rate is fixed at the time of issue.
  • Gold bonds offer indexation benefits. This means that long-term capital gains arising from bonds are eligible for indexation benefits.
  • The investor can trade the gold bond on the stock exchange within the specified date. Trading is allowed only after the lock-in period is over.
  • Gold bonds can be used as collateral/security against the loan. The loan to value ratio is decided by the bank at the time of lending money.

Sovereign Gold Bond 2021-22 Calendar

mr no Part Membership date issue date
1 2021-22 – Series 1 May 17 – May 21, 2021 May 25, 2021
2 2021-22 – Series 2 May 25 – May 28, 2021 01 June, 2021
3 2021-22 – Series 3 31 May – 04 June, 2021 June 08, 2021
4 2021-22 – Series 4 July 12 – July 16, 2021 20 July 2021
5 2021-22 – Series 5 August 09 – August 13, 2021 August 17, 2021
6 2021-22 – Series 6 August 30 – September 03, 2021 September 07, 2021

How to buy Sovereign Gold Bond?

Gold bonds are sold by scheduled banks except small finance banks and payments banks. These bonds are also sold on the stock exchanges BSE, NSE and designated post offices. To buy the bond, you need to fill out the form and deposit the amount.

If you are facing problem in buying gold bond offline, then you can buy it online. Here is the step by step process to buy SGB in ICICI Bank.

Step 1- Login to your ICICI Bank net banking account

Step 2- Go to Investments and Insurance

Step 3 – Click on Invest Online

Step 4 – Select Sovereign Gold Bond and specify the quantity you wish to buy.

You can also use the iMobile app to buy gold bonds. Buying SGB online will get you a discount of Rs.50 per gram.

Disclaimer: The opinions expressed within this article are the personal opinions of the author. The facts and opinions appearing in the article do not reflect the views of knews.uk and knews.uk does not assume any responsibility or liability for the same.

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