Sovereign Gold Bond SGB 2023-24 (Series II): Should You Invest?

The 2nd tranche of Sovereign Gold Immuration 2023-24 has been launched. i.e. Sovereign Gold Yoke Scheme FY 2023-24 Series 2 (or Series II).

And just to requite you a briefer well-nigh these gold bonds, the SGBs are government-backed securities denominated in grams (gms) of gold. They were launched to act as substitutes of holding physical gold. The Gold Immuration are issued by Reserve Bank of Indian (RBI) on behalf of Government of India. At the time of opening of subscription, the investors have to pay the issue price of the series.

Sovereign Gold Yoke Scheme 2023-24 (Series 2)

So here are few important points well-nigh the latest series 2 of Sovereign Gold Yoke FY 2023-24:

• Subscription Date – The Sovereign Gold Yoke Scheme 2023-24 – Series 1 will be unshut for subscription from 11-15 September 2023.
• Issue Date – Without the closure of subscription window for SGB 2022, the gold immuration will be issued to investors on 20 September 2023.
• Issue Price – The issue price of SGB 2023-24 Series 2 has been stock-still at Rs 5923 per gram of gold. A unbelieve of Rs 50 per gram will be offered to those applying online and making payment through digital mode. For them, the issue price of gold yoke will be Rs 5873 per gram of gold. If you are curious well-nigh how the issue price is decided, then know that the price of each series (tranche) of gold yoke is stock-still on the understructure of simple stereotype of the latter price of gold of 999 purity for the last 3 working days of the week preceding the subscription period (in INR terms). Increasingly details of the issue price here on RBI website. And if you are interested, then do trammels the full history of gold yoke prices in India.
• Tenure of Gold Bond – The tenure of the Sovereign Gold Yoke 2023-24 Series 2 is 8 years. However, these have an exit option without the 5th year and this option can be exercised on the interest payment dates. So if an investor wants, they can take the exit option on the interest payment dates of the 6th, 7th year too. But no redemptions unliable surpassing 5th year. What will be the redemption price? It will be approximately equal to the simple stereotype of the latter price of gold of 999 purity during the previous week.
• How to redeem Sovereign Gold Yoke Scheme FY 2023-24 Series 2 surpassing 5 years? The gold immuration wilt tradeable on stock exchanges within a fortnight of the issuance (subject to liquidity). So if an investor wants to exit surpassing 5th year too, then the gold immuration can be sold in the secondary market surpassing the 5th year too for those looking to sell gold immuration surpassing 5 years. But do note that the market price of sovereign gold yoke today or gold yoke rate today may be higher or lower than the issue price for any of the tranches. Read increasingly well-nigh premature liquidation of gold bonds.
• Interest Rate on Gold Yoke FY 2023-24 Series 2 – The Sovereign Gold Immuration pay a fixed interest rate of 2.50% per annum payable semi-annually on the original investment value. Do note that 2.5% interest will be paid on the original investment value and not the current value of your investments. So if you invested at Rs 5000 but the current value is Rs 5200, then interest will be paid on Rs 5000 which is the initial investment amount.
• Minimum Investment in Sovereign Gold Yoke (2023-24) Series 2? The minimum investment of 1 gram of gold is required.
• Maximum Investment in Sovereign Gold Yoke (2023-24) Series 2? The maximum investment or subscription is 4 kgs per person per financial year. Do note that this yearly investment limit is combined limit for all investment under variegated tranches and those purchased via the secondary market.
• Who can invest in Gold Yoke FY 2023-24 Series 2? The Gold immuration scheme FY2023-24 is misogynist only for Resident Indians. So that is your wordplay to Who can invest in sovereign gold yoke 2023-24. NRIs cannot invest in the Sovereign Gold Yoke Scheme FY 2023-24 Series 2 or SGB 2023 Series II.
• Taxation of Interest Income from Sovereign Gold Yoke Scheme FY 2023-24 Series 2? The 2.5% Interest Income from Gold Immuration is taxable as per the income tax slab. So for someone in 10%, 20%, or 30% tax bracket, the pre-tax 2.5% returns will be converted into the post-tax return of 2.25%, 2% and 1.75% respectively.
• Taxation of Wanted Gains from Sovereign Gold Yoke Scheme FY 2023-24 Series 2? If you redeem the SGB series Gold Yoke without the 5th year, i.e. once you wilt eligible to redeem it at the end of 6th, 7th and 8th year, then any wanted proceeds welling due to redemption without the 5th year is exempted from any tax. No tax on wanted gains without the 5th year redemptions. But if you wish to exit surpassing 5th year and sell on stock mart / secondary market, then the gains will be considered as wanted gains. This sale itself has two aspects. First is if you sell surpassing 3 years (36 months) and have wanted gains, then such wanted proceeds will be taxed as per your income tax slab. But if you sell the immuration without 3 years but surpassing maturity, then any wanted proceeds welling will be taxed at 20% with indexation. Read increasingly well-nigh the latest rules for Taxation of Gold Immuration in India.
• How to buy Sovereign Gold Yoke Scheme 2023-24 Series 2? The gold immuration will be sold and can be purchased via scheduled commercial banks, i.e., you can buy sovereign gold yoke online ICICI or you can moreover buy sovereign gold yoke online SBI. You can plane buy RBI Gold immuration at designated post offices. Stock Holding Corporation of India Ltd. (SHCIL), stock exchanges like NSE, BSE.

So that was well-nigh the Series 2 of Gold Immuration 2023.

The sovereign gold yoke scheme was launched in 2015 with the aim of reducing the demand for physical gold in India. And for this, a unique spare interest (2.5% per annum) was offered to make it attractive. So the Sovereign Gold Yoke Scheme 2023-24 Series II has 2 streams of income. The first is the stock-still interest of 2.5% per annum paid semi-annually. The second is the potential for wanted gains in future.

Should you invest in Sovereign Gold Yoke 2023-24 Series 2?

Gold is often treated as a unscratched oasis asset. Many people are tumbled well-nigh how much to invest in gold. Do read the vendible in the link older to know what is right for you.

SGB 2023-24 (Series 2) or for that matter any gold instrument (gold ETF, gold funds, etc.) should be part of the overall windfall typecasting strategy. One should never invest in any windfall or product randomly. Do note that gold is weightier taken as a hedge as every now and then, the gold prices are prone to fluctuations based on macro or geo-political events globally as well as USDINR rate movements. But in unstipulated and for most investors, the gold typecasting should be limited to up to 10% of the portfolio size.

The Sovereign Gold Yoke Scheme 2023-24 Series 2 not only allows investors to goody from the wanted appreciation but moreover pay a stock-still interest on the holding. No doubt well-nigh that. But the Sovereign Gold Immuration (SGB 2023) are weightier suited those with a longer investment horizon, as these gold immuration come with a long tenure, i.e. 8 years. No doubt you can exit via secondary sale on stock exchanges too. But the liquidity is very limited in the secondary market for gold bonds. So those who want to invest for the short-to-medium term, it’s largest to take the Gold ETFs or Gold bilateral funds route.

That’s all you wanted to know well-nigh Series 2 of SGB 2023 (Sovereign Gold Immuration FY 2023-24). I hope you have understood the gold yoke rates and found this discussion on features of the latest Sovereign Gold Immuration FY 2023-24 Series 2 (September 2023).