Explore Our Affordable Courses

Click Here

Sovereign Gold Bond Scheme 2023-24 (Series IV)

Context:

Sovereign Gold Bonds 2023-24 (Series IV) will be opened for subscription from 12th-16th February, 2024. 

Sovereign Gold Bond Scheme

  • Launched: By the Government of India (GOI) in November 2015, under the Gold Monetization Scheme
    • The SGBs are recognised as Government of India Stock under the Government Securities Act, 2006.
  • Deals With In this scheme, RBI makes the issues open for subscription in tranches in consultation with GOI. 

Features of the Sovereign Gold Bond Scheme

  • Minimum value: Sovereign Gold Bonds will be denominated in the multiples of a gram of gold with a minimum unit of 1 gram.
  • Maximum limit: The maximum limit of gold prices that can be subscribed by an individual is 4 kg, 4 kg for a Hindu-Undivided Family and 20 kg for trusts and other similar entities. 
    • If the gold bonds are co-owned, the investment limit will be 4kg, which will only apply to the first applicant
  • Interest rate: The interest for the gold bonds will be 2.50% per annum which is payable semi-annually on the nominal value. 
  • Tenure: The bond’s tenure will be for 8 years with an exit option available in the 5th, 6th and 7th year on the dates of interest payment. 

Sovereign Gold Bond

About Sovereign Gold Bond (SGB)

  • SGBs are government securities denominated in grams of gold. 
  • They  fall under the category of Debt Funds and are substitutes for holding physical gold. 
  • The Bond is issued by the Reserve Bank on behalf of the Government of India.
  • Upon maturity, these bonds incur no tax on redemption. 
    • This makes them an attractive option for long-term investors. 
  • Buying of SGBs: Through scheduled commercial banks (excluding small finance banks, payment banks, and regional rural banks), Stock Holding Corporation of India (SHCIL), Clearing Corporation of India (CCIL), designated post offices, National Stock Exchange of India, and Bombay Stock Exchange.
  • Significance: Although SGBs may possess less liquidity than tangible gold assets, they have the advantage of being tradable on stock exchanges within two weeks from their date of issuance.

Advantages Of Sovereign Gold Bond

  • These bonds can also be used as collateral for loans.
  • The bond payment can be made with cash up to a maximum of Rs.20,000 or demand draft, cheque or through e-banking.
  • These bonds are eligible to be converted into DEMAT form.
  • Gold bonds are a form of security as they are issued in the form of the Government of India stock.
  • Interest earned on the gold bonds is taxable as per the provisions of the Income Tax Act, 1961.
  • Gold bonds eliminate the costs and risks of storage.

Disadvantages Of Sovereign Gold Bond

  • Maturity: Many investors are discouraged by gold bonds because of the long maturity period of 8 years. 
  • Capital Loss: The investment in SGB can result in a capital loss as the bond value is directly linked to the price of gold in the international markets.
    • As the price at which the bond is higher than the price at which you redeem it at maturity, you might end up at a loss.
Also Read: Asset Quality Of Indian Banks

News Source: PIB

Must Read
NCERT Notes For UPSC UPSC Daily Current Affairs
UPSC Blogs UPSC Daily Editorials
Daily Current Affairs Quiz Daily Main Answer Writing
UPSC Mains Previous Year Papers UPSC Test Series 2024

 

To get PDF version, Please click on "Print PDF" button.

Need help preparing for UPSC or State PSCs?

Connect with our experts to get free counselling & start preparing

Download October 2024 Current Affairs.   Srijan 2025 Program (Prelims+Mains) !     Current Affairs Plus By Sumit Sir   UPSC Prelims2025 Test Series.    IDMP – Self Study Program 2025.

 

THE MOST
LEARNING PLATFORM

Learn From India's Best Faculty

      

Download October 2024 Current Affairs.   Srijan 2025 Program (Prelims+Mains) !     Current Affairs Plus By Sumit Sir   UPSC Prelims2025 Test Series.    IDMP – Self Study Program 2025.

 

Quick Revise Now !
AVAILABLE FOR DOWNLOAD SOON
UDAAN PRELIMS WALLAH
Comprehensive coverage with a concise format
Integration of PYQ within the booklet
Designed as per recent trends of Prelims questions
हिंदी में भी उपलब्ध
Quick Revise Now !
UDAAN PRELIMS WALLAH
Comprehensive coverage with a concise format
Integration of PYQ within the booklet
Designed as per recent trends of Prelims questions
हिंदी में भी उपलब्ध

<div class="new-fform">







    </div>

    Subscribe our Newsletter
    Sign up now for our exclusive newsletter and be the first to know about our latest Initiatives, Quality Content, and much more.
    *Promise! We won't spam you.
    Yes! I want to Subscribe.