The Sovereign Gold Bonds offer a superior alternative to holding gold in physical form. The quantity of gold for which the investor pays are protected, since he receives the ongoing market price at the time of redemption/premature redemption. The risks and costs of storage are eliminated. Investors are assured of the market value of gold at the time of maturity and periodical interest.
The SGB is free from issues like making charges and purity in the case of gold in jewellery form. The bonds are held in the books of the RBI or in Demat form, eliminating risk of loss of script, etc.
The bonds are restricted for sale to resident Indian entities including individuals, Minors, HUFs, Trusts, Universities and Charitable institutions.
The bonds will be denominated in units of one gram of gold and multiples thereof.
Minimum permissible investment will be 1 gram of gold.
Maximum limit of subscription shall be of 4 kg for individuals, 4kg for Hindu Undivided Family (HUF) and 20 kg for trusts and similar entities notified by the government from time to time.
The limit is fixed on a fiscal year (April-March) basis.
The investors will be paid Interest on the amount of initial investment at the rate notified by RBI for a particular tranche at the time of its launch and is payable semi-annually.
