Sovereign Gold Bonds Scheme is an indirect way of investing in Gold. Instead of buying Physical Gold, investors can invest in gold in a paper form through Sovereign Gold Bonds. The under-lying asset for these bonds is Gold. These bonds will track the price of gold, plus an extra interest earning on top of that.
The first tranche (issue) of the Gold Bonds scheme was launched in November 2015. The first tranche was open for subscription from November 05 to November 20, 2015. The issue had got a subscription for 915.95 kg gold amounting to Rs 246 crore.
The Reserve Bank of India, in consultation with the Government of India, has decided to issue second tranche of Sovereign Gold Bonds.
Sovereign Gold Bonds Scheme 2016
Applications for Second tranche of ‘Sovereign Gold Bonds Scheme’ will be accepted from 18th January to 22nd January, 2016. The Gold bonds will be issued on 8th February, 2016. The Bonds will be sold through banks, Stock Holding Corporation of India Limited (SHCIL) and designated post offices.
Below are the key features of Gold Bonds Scheme 2016;
- Second tranche Subscription dates : January 18th to January 22nd of 2016.
- Public Issue Price : The Reserve Bank has fixed the public issue price at Rs 2,600 per gram for the sovereign gold bonds. (The issue price for first tranche was at Rs 2,684 per gram)
- Who can buy Gold bonds? : The Bonds will be restricted for sale to resident Indian entities including individuals, HUFs, trusts, Universities and charitable institutions.
- Duration of Bonds : The tenor (tenure) of the Bond will be for a period of 8 years with exit option from 5th year which can be exercised on the interest payment dates.
- Minimum investment Size : Minimum permissible investment will be 2 units (i.e. 2 grams of gold).
- Maximum allowed investment : The maximum amount subscribed by an entity will not be more than 500 grams per person per fiscal year (April-March). A self-declaration to this effect will be obtained.
- Interest rate on Gold Bonds : The investors will be compensated at a fixed rate of 2.75 per cent per annum payable semi-annually on the initial value of investment.
- Where to buy Gold Bonds ? : Bonds will be sold through banks, SCHIL and designated Post Offices, as may be notified, either directly or through agents.
- KYC Documentation : Know-your-customer (KYC) norms will be the same as that for purchase of physical gold. KYC documents such as Voter ID, Aadhaar card/PAN or TAN /Passport will be required.
Sovereign Gold Bonds Scheme & Application Form
The application forms for buying Sovereign Gold Bonds are available at banks (all schedule commercial banks) or at designated post office branches. You may click on the below image to download the application form (Form A).
(Read my article on : How to fill Gold Bonds Scheme application form?)
Should you invest in Sovereign Gold Bonds Scheme 2016 second issue? Click here to read FAQs & my detailed review on Gold Bonds Scheme.
Latest update (29-Jan-2016)
During the second tranche of Sovereign Gold Bonds, the government has received applications from 3.16 Lakh applicants for a total subscription of 2,790 Kgs of Gold amounting to Rs 726 crore.
There has been almost 3 times increase in no of applicants when compared to the first Issue. The bonds for the second tranche of the scheme would be alloted on February 8.