RBI Announced Sovereign Gold Bond Scheme 2022-23

The Sovereign Gold Bond Scheme 2022-23 – Series III has been launched by the RBI and will be available for subscription from December 19 to December 23.

Sovereign Gold Bond Scheme
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The Sovereign Gold Bond Scheme 2022–23 – Series III, which is open for subscription from December 19–23, 2022, has been announced by the Reserve Bank of India (RBI).

Since the investor obtains the current market price at the time of redemption or early redemption, the amount of gold for which he paid is protected. Investors who purchased gold bonds three years ago are currently resting on a gain of 45%, while those who purchased them five years ago have seen a valuation increase of 89%.

Sovereign Gold Bond Scheme offer this time

The nominal value of the bond is equal to Rs 5,409 per gramme of gold based on the simple average closing price for 999-purity gold for the last three working days of the week prior to the subscription period, December 14, 15, and 16, 2022, as published by the India Bullion and Jewellers Association Ltd (IBJA). Investors who apply online and pay for the application using digital means receive a discount of Rs 50 per gramme less than the nominal pricing.

The Return of Sovereign Gold Bond Scheme

The RBI said on Friday that the Series XII gold bonds, which were issued in December 2017 at a price of Rs 2,890 per gramme, will be redeemed on December 17 at a price of Rs 5,409 per gramme, a gain of 89.16%.

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In November 2021, the RBI made the gold bonds available at a price of Rs 4,791 per gramme. This has since increased to Rs 5,409, representing an increase of 12.89%. With the 2.50 percent interest rate the RBI is offering, the return for investors after a year is 15.39 percent. At the current market pricing, investors who purchased gold bonds in November 2019 for Rs 3,795 per gramme are sitting on a gain of 42.52 percent.Including the 2.50 percent interest rate, the gain is a total of 45%.

Gold bonds pay interest at a rate of 2.50 percent (fixed rate) per year on the amount of the initial investment, while banks give 6.70–7% return on one-year deposits. The investor’s bank account will get interest credits twice a year, and the last interest payment will be due at maturity along with the principal.

The draw is that gold bonds will be redeemed in Indian rupees at maturity, with the redemption price based on a simple average of the closing price of 999-purity gold over the previous three business days as reported by the IBJA.

How many Gold has been issued in Sovereign Gold Bond Scheme

In 61 bond issues since 2016–17, the government has sold gold bonds totaling 96,283 kg (96.28 tonnes), or Rs 52,080 crore at the current market price. Up to now, investors have prematurely redeemed 876 kilogramme of gold bonds.

What is Sovereign Gold Bond Scheme?

Government securities with gold-based par values are known as gold bonds. They serve as alternatives to holding actual gold. The issuance price for investors must be paid in cash, and the bonds must be redeemed in cash when they reach maturity. On behalf of the government, the RBI issues the bond.

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These bonds are a far better option than keeping gold in physical form. Storage-related dangers and expenses are removed. The market value of gold at the time of maturity and monthly interest are guaranteed to investors. In the case of gold used in jewellery, it is free from concerns such as making charges and purity.The risk of loss is eliminated because the bonds are kept in the RBI’s books or in demat form. Although bonds have an eight-year tenor, they can be redeemed after five years.

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