The Tenth Tranche of Sovereign Gold Bond 20-21

The tenth tranche of Sovereign Gold Bond (SGB) 20-21 will open for subscription from January 11^th to January 15^th, 2021 with 19^th January 2021 as the settlement date.

What is SGB?

SGBs are government securities denominated in grams of gold. They are substitutes for holding physical gold. The Bond is issued by Reserve Bank on behalf of the Government of India.

About the Tenth Tranche

The tenth tranche of the SGB is starting on 11^th January with the issue price of Rs. 5,104 per gram. Where a further Rs. 50 per gram discount will be given to those investors who apply online and makes digital payment bringing the price down to Rs. 5,054 per gram. It will offer an annual simple interest of 2.5% on the investment amount which won’t be the discounted amount of Rs. 50 but the actual amount.

One can also trade the bonds on the stock exchange within a specific date and it can also be used as collateral for loans. SGB comes with a tenure of 8 years with a lock-in period of 5 years. The bond becomes capital to gain free if kept for all 8 years. The maximum subscription possible for an individual and HUF is 4 kg per fiscal year whereas for trusts and similar entities it is 20 kg. While the minimum subscription is only 1 gram (Rs. 5,104 without discount) allowing even small investors to participate.

Investors can buy the same through commercial banks, post offices, stock exchanges, etc.

Past issues of SGB

The price for the 9^th tranche was Rs. 5000 per gram and for the 8^th tranche was Rs. 5177 per gram. The first launch of the same was in 2015 to reduce the demand for physical Gold. As per RBI’s annual report of 2019-20 a total of Rs. 9,652.78 crore or 30.98 tons has been raised so far since 2015.

History of Gold

Gold also called yellow metal is always recommended in the portfolio especially at such times when the other investment options seem bleak. In 2020 when the world was under lockdown due to COVID – 19 this yellow metal shone the most reaching the all-time high of Rs. 56,191 per 10 gram which started with just Rs. 39,100 per 10 gram a growth of 43%! With failing banks and a highly volatile share market, SGB is the safe-heaven for investors wanting to invest with a long-term view.

For further details visit: https://m.rbi.org.in/Scripts/FAQView.aspx?Id=109

Rhishabh Naredi

A blend of curiosity and writing got me into research about critical political decisions, the economy, and business policies. Always trying the stories which might make a difference in the way we look at things!

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