The Sovereign Gold Bond plan is an investment in gold that is issued by the Reserve Bank of India(RBI) on behalf of the Government of India(GOI).
This plan aims to reduce the demand for physical gold, thereby keeping a tab on imports of gold in India and utilising resources effectively.
It offers the same benefits as of physical gold. The value of SGB increases with the market rate of gold.
The minimum permissible amount allowed for investment in bond is 1 gram of gold. The maximum limit of the subscription is 4KG for individuals/HUFs and 20KG for trusts and similar entities per fiscal year, which is notified by the RBI from time to time. In a condition of joint holding, the investment limit of 4KG is applied to the first applicant only.
Now let’s discuss about Sovereign Gold Bond Calculator.
Here I’m sharing an illustration of SGB return in case you have invested in year 2015 so how your money would have grown in the past 5 years & if you redeem on current rate what will be ROI you may expect. As per the gold trend the ROI one can easily fetch by having invested in gold is 8% on an average.
Having considered the actual gold rate over a span of 5 years lets see how my money have grown if I have invested in 100 units of SGB in year 2015 when the gold rate for 1gm was Rs.2634 and I remained invested up-to the lock in period of 5 years & now on current date I wish to redeem my SGB so how will returns look like:
|Issue Price/gm||No. of Units||Investment Value||Fixed ROI|
|Year||ALTP on end of 1st half year||1st Half Year Interest||ALTP on end of 2nd half year||2nd Half Year Interest||Annual Return|
After 5 Year you apply for redemption & the last traded price is 5050/gm
|Total Semi Annual Return||40785|
These returns are basis the gold trend over 5 years as gold been very bullish during pandemic due to low market sentiment otherwise considering trend for 10 years this return would have averaged out around 18 looking at the gold trend:
|Jan 28, 2021||₹49900||₹9200|
|Jan. 28, 2020||₹40,700||₹13196|
|Jan. 28, 2018||₹27,504||₹1050|
|Jan. 28, 2017||₹26,454||₹2192|
|Jan. 28, 2016||₹24,262||₹-832|
|Jan. 28, 2015||₹25,094||₹-106|
|Jan. 28, 2014||₹25,200||₹-3268|
|Jan. 28, 2013||₹28,468||₹744|
|Jan. 28, 2012||₹27,724||₹8137|
|Jan. 28, 2011||₹19,587||₹3578|
|Sr. No.||Tranche||Date of Subscription||Date of Issuance|
|1.||2021-22 Series I||May 17–21, 2021||May 25, 2021|
|2.||2021-22 Series II||May 24–28, 2021||June 01, 2021|
|3.||2021-22 Series III||May 31-June 04, 2021||June 08, 2021|
|4.||2021-22 Series IV||July 12-16, 2021||July 20, 2021|
|5.||2021-22 Series V||August 09-13, 2021||August 17, 2021|
|6.||2021-22 Series VI||August 30-September 03, 2021||September 07, 2021|
Price of the SGBs shall be fixed in INR(Indian Rupees) on the basis of simple average of closing price of gold of 999 purity published by the Price of the SGBs shall be fixed at INR (Indian Rupees) on the basis of simple average of the closing price of gold of 999 purity published by the India Bullion
& JAL (Jewelers Association Limited) for the last 3 working days of the week preceding the subscription period.
The issue price of the SGBs will be Rs 50/gram less than the nominal value to those investors applying through online.
The SGBs can be held in the Demat account. For this, the applicant has to mention the details of DP-ID and DP Client ID in the application form.
The interest and price will be notified by the Reserve Bank of India at the time of issuance. Interest will be credited semiannually to the registered bank account of the investor and the last interest will be payable on maturity along with the principal amount.
TDS is not applicable on the SGB. Although, it is the responsibility of the subscriber to comply with the tax laws.
On maturity, the redemption proceeds will be equivalent to the prevailing market value of grams of gold originally invested in INR.
The redemption price shall be based on simple averages of the closing price of gold of 999 purity of previous three working days from the date of repayment,
published by the Indian Bullion and JAL.
Time needed: 3 minutes.
Additional Frequently Asked Questions
The investors will be issued a Certificate of Holding on the date of issuance of the this bonds.
Certificate of Holding can be collected from the Bank’s branches or is sent directly to registered e-mail ID from RBI (Reserve Bank of India).
The only single holding mode is allowed and in the case of an application through a Joint account, the SGB is issued in the name of the Primary Account holder.
Yes, each family member can hold the SGB if they satisfy the eligibility criteria for investing in Bonds.
There may be a risk of capital loss if the market price of gold declines. Although, the subscriber does not lose in terms of the gold’s units which he has paid for.
Both interest and redemption proceeds will be credited to the registered account number furnished in the application form.
Yes. A subscriber can buy 4Kg worth of gold every fiscal year (April-March) basis.
Rights Issue of Shares under Companies Act 2013 Rights issue or Rights Offer refers to… Read More
Record Date and Ex-Dividend Date in India Are you someone who hears the dividend related… Read More
What is a Rights Issue of Shares in India? In this article, we are going… Read More
Rights Issue Advantages and Disadvantages Generally, companies have a variety of ways to raise equities… Read More
What does Rights Issue mean for Shareholders? In this article, we are going to discuss… Read More
What are Tax Free Bonds NHAI? Indian Bonds are a kind of debt instrument. By… Read More