HDFC Bank Ltd’s Journey to becoming the...
As of November 25, 2020, HDFC Bank had hit a market cap of ₹8 Lakh Crore and had become the third company to do so after Reliance and TCS.
30 Aug, 2021
7 min read
2333 Views
For the uninitiated, sovereign gold bonds can be understood to be certificates issued and mandated by the Reserve Bank of India.
What are Sovereign Gold Bonds?
They are issued against grams of gold. What makes them truly interesting is that they allow you to invest in gold without being burdened with having to securely look after any physical gold.
Instead, they allow you to make a secure investment owing to the fact that gold isn’t as influenced by fluctuations in the market the way other investments might be.
Owing to the fact sovereign gold bonds are issued by the Reserve Bank of India and fall under the government’s issuance of stocks, there exists a predetermined time frame within which one can subscribe to these stocks. This means that during this period a scheme for sovereign gold bonds is issued to investors in tranches.
Ordinarily, the Reserve Bank of India makes announcements pertaining to the issuance of sovereign gold bonds in a press release which is made in intervals of 2 to 3 months. Individuals have a week within which they can subscribe to the scheme.
Gold Today
From now on, the price of gold will depend upon the latest strain of the Coronavirus, the extent to which vaccinations occur, how soon and to what extent economies open up and the way in which policies tighten up. Keeping these facts in mind it is recommended that investors have gold in their portfolio as it allows for diversification and can provide protection against inflation.
Looking at the New Sovereign Gold Bond Scheme
Sovereign gold bond series v for the year 2021 to 2022 have been available for investors to subscribe as of August 10 this year. The time frame for subscription comes to a close on August 16.
The issue price for these is INR 4,790. This price has been set keeping in mind the average closing price which was released by the Indian Bullion and Jewellers Association limited. This average is based on the price of gold which has a 999 purity and takes into account the price for the previous three business days of the week prior to the subscription period. This means that IBJA took into account the last three business days of the first week of August.
Those who seek to invest in the sovereign gold bond scheme online are entitled to a discount of INR 50 owing to which they will have an issue price amounting to INR 4,740.
It is important to note that this issue price falls below that of the previous three rounds of sovereign gold bonds issued for 2021-2022 which makes it more enticing.
Things to Know about Sovereign Gold Bonds
Tenure – Sovereign gold bonds have a tenure that amounts to eight years. You can redeem them after 5 years from the interest payment dates.
Form – They can be held in the physical form or in your Demat account. Conversions between the two forms can be made at any point in time.
Selling your SGBs – Should you need to, you can sell your bonds prior to the five-year period ending. This sale can occur on the stock exchange.
Should you Invest in the New Gold Bond Scheme?
Gold serves as a viable safeguard against inflation and provides holders with liquidity should they need it in instances of political and economic instability.
India is home to the world’s most avid gold investors and sovereign gold bonds make for a viable investment for a number of reasons some of which have been listed below.
Interest – investments made accrue an interest. This occurs in stark contrast to physical gold which doesn’t generate additional interest. This interest is taxed however profits earned aren’t.
Capital gains – Adding to their appeal, capital gains generated via sovereign gold bonds do not incur any taxes. This is provided they have been redeemed via the Reserve Bank of India and haven’t been via the profits owed to sale on the stock exchanges. In such scenarios, indexation for computing comes into effect should the bonds be held for more than 36 months. Profits generated via bonds sold on stock exchanges prior to the 36-month time frame are recognized as short-term. They are taxed in accordance with the tax slab applicable to you.
Diversification – By adding sovereign gold bonds to your retinue, you diversify your portfolio which strengthens it.
Inflation – Gold investments including sovereign gold bonds protect against inflation.
Conclusion
Prior to making any investment decisions first consider your portfolio, risk capacity, and whether you can afford to spare funds on the investment you choose.
FAQs
Q1. What is the tenure of sovereign gold bonds?
A1. Sovereign gold bonds have a tenure of 8 years.
Q2. Who can invest in a sovereign gold bond?
A2. An individual, trust, resident university, and trust (regardless of whether they are or aren’t charitable) is authorized to invest in a sovereign gold bond.
Q3. What is the price of the current series V sovereign gold bond 2021-2022?
A3. The current price for the series V sovereign gold bond 2021-2022 amounts to INR 4790.
How would you rate this blog?
Related Blogs
Translate the power of knowledge into action. Open Free* Demat Account
Latest Blog
-
04 Apr, 2021
7 min read
Dr. Reddy's Laboratories Ltd - Is this...
2020 was a peculiar year, especially in terms of the industries that managed to flourish despite the challenges that the lockdowns and isolation meas…
-
07 Jul, 2021
10 min read
Ixigo IPO: Ixigo Plans a 750 Crore IPO
Ixigo is a travel portal and it plans to host an IPO of between Rs 1500 crore to Rs 1800 crore later this year.
-
06 Oct, 2021
5 min read
Byju’s IPO Plans
Currently, India's most valuable unicorn, online education provider Byju's, is in talks to raise $400 million to $600 million and then expedite plans…
-
15 May, 2021
8 min read
The Best Penny Stocks in India
Investing and trading on the stock market has the potential to generate profits.
-
15 Jun, 2021
10 min read
A sneak peek at Zomato's IPO plans
Covid-19 came and turned the world upside down – tourism, airlines, fashion, F&B have suffered tremendously but online financial gateways, video conf…
-
08 May, 2021
8 min read
Adani Ports and its recent rise. Here's why
If you have been following the rise of Adani Ports’ stock price in recent weeks, you are probably curious as to what is driving this growth.
-
11 Jul, 2021
11 min read
Go Air IPO: Go Air looks to enter the IPO market
GoAir, one of India’s most popular airlines, is preparing for an initial public offering (IPO). Rebranding itself as “Go First”, the airline filed a …
-
01 Apr, 2021
7 min read
Vodafone-Idea: What went wrong?
Mergers and acquisitions can turn the eyes of stock market investors towards the possible action that such large-scale actions can bring to the futur…
-
11 Jun, 2021
7 min read
Stock Picks Based on Q4 Results
As FY21 drew to a close, it was a déjà vu moment as lockdowns (although state-level), and a second wave of the COVID-19 pandemic defined investor beh…
-
28 Dec, 2020
6 min read
The Rise of Reliance: as told through its stocks
Reliance Industries Limited (RIL) is India’s largest publicly traded company. Read on to know more about history of Reliance stocks and it’s rise in …
-
24 Aug, 2021
5 min read
Stocks to Watch: NMDC, Tata Motors,...
This article seeks to shed light on stocks that have recently been made available in the market. Included among them is the government’s stake in NMD…
-
08 Jul, 2021
10 min read
The Success Story of Pharmeasy
Today, PharmEasy is a reputable and well-known firm whose aim is to become the best health care delivery platform in India.
-
10 Mar, 2021
7 min read
PVR - a comeback on the cards?
Who doesn’t like to watch movies. But when the COVID pandemic first hit the Indian subcontinent, investors began to withdraw from their investments -…
-
24 Feb, 2021
7 min read
Shree Cements: A lesson in Prudence
This article will help you take a deeper look into the rise of Shree Cements, through the lens of it’s stock performance over the past few years.
-
07 Apr, 2021
7 min read
The Tata Motors Upheaval Story
The automotive industry has been famously tied to the performance of the extended economy for most countries.
-
13 Oct, 2021
6 min read
LIC Seeks to Appoint CFO
According to a notice on its website, the state-owned Life Insurance Corporation of India (LIC) is looking for a Chief Financial Officer ahead of an …
-
21 May, 2021
8 min read
Asian Paints: 7000% returns in 17 years
Some investment propositions have the ability to make investors – both the newbie and the expert alike – stop and stare.
-
24 Sep, 2021
7 min read
Indian Railways Share Quarterly Results -...
The Indian Railway Catering and Tourism Corporation (IRCTC) is a subsidiary of the Indian Railways.
-
31 May, 2021
7 min read
The Rise of Metal Stocks Amid the 2nd Wave
The past few months have brought with them several changes.
-
29 Oct, 2021
7 min read
Sugar Stocks Down as Sensex Falls
Sugar stocks are indicative of important trends in the market. They are also an important cog in the industries sector of the economy. Read on to kno…
-
06 May, 2021
9 min read
Should you place your bets on ITC?
Investors trading on the stock market are advised to focus on maximising their wealth by making shrewd decisions based on the performance and fundame…
-
06 Jan, 2021
6 min read
Tata Consultancy Services: A story...
Tata Consultancy Services (TCS) is the world’s most valuable IT company. Read this success story of how TCS expanded globally, acquired new verticals…
-
09 Jul, 2021
9 min read
IPO Alert! Devyani International files...
Against all odds, the Indian market, despite a minor tailspin due to the nationwide lockdowns last year, has seemed to recover relatively well.
-
05 Mar, 2021
7 min read
The LIC IPO Game Plan
IPOs have attracted overt attention of retail and institutional investors alike in the recent Indian stock market scene.
-
23 Aug, 2021
6 min read
Clean Science, GR Infraprojects IPO...
This article seeks to shed light on initial public offerings (or IPOs) that have recently been up for grabs in the market. Included among them are Cl…
-
13 Jun, 2021
7 min read
Soaring commodity prices. Here's why
Prices of commodities in the energy, metal and agriculture sectors have seen a sustained rise in the first few months of this year.
-
03 Jun, 2021
6 min read
Hotel Stocks on the Rise Despite Lockdown
The hospitality industry suffered a major setback when the prime minister announced a nationwide lockdown for 3 weeks at the end of March 2020.
-
23 Jul, 2021
8 min read
Laurus Labs Share: More than 50% Return...
Shares of pharmaceutical and biotech company Laurus Labs have continued to surge upwards and have hit a new high amounting to INR 599 per share on th…
-
01 Jun, 2021
8 min read
Muted Tata Communications stock in wake...
There is a meme going around that says: Sneezes went from “Bless you” to “To hell with you” real soon.
-
05 Oct, 2021
7 min read
LIC IPO: All we Know So Far
While investors await the Life Insurance Corporation's mammoth public offering mostly happening this financial year, why do experts think the IPO has…
-
16 Mar, 2021
8 min read
Indiamart’s QIP: behind the scenes
Last year, when the pandemic had hit businesses hard across the globe, most people resorted to the internet to keep their businesses afloat.
Ready To Trade? Start with
Subscribe to #SmartSauda Newsletter
CONTINUE WITH GOOGLE
CONTINUE WITH FACEBOOK
