Sovereign Gold Bonds Scheme Jan 2016 Issue : Details & Review

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;Sovereign gold bonds scheme 2016 by govt pic

  • 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).

Sovereign gold bonds application form download

(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.

  • lakshmi says:

    Hello Sreekanth,

    Is there any scheme whereby I convert my monthly savings investments to physical gold

    My savings : 1gm gold rate every month for 3 years
    so that I will be accumulating 36gms

    am not bothered about returns.I just want to convert it to gold

    I have read about Gold ETFs, but for that redemption in the form of gold is possible for a min of 1kg

    • Dear lakshmi,
      Investments in phsycial gold can have lot of risks (storage, safety, purity issues, etc.,)
      You may consider investing in Gold Bonds. These can be a better option.
      Kindly read : Gold bonds – Details, Features & Review.

      The principal amount of investment, which is denominated in grams of Gold will be redeemed at the prices of gold on redemption date. So, if gold prices have been appreciated then you can get the capital appreciation on the invested amount plus interest payment.

  • Anju Nandal says:

    Hello Sreekanth,

    i want to know that is it is beneficiary for house wife for looking long investment.

    • Dear Anju,
      Investing in Bonds is better than investing in Jewelry. But as a lady your preferences can be different.
      If you would like to invest a portion of your savings in Gold for long-term, Gold bonds Scheme may outscore the Gold funds / physical gold.
      Kindly read my review, click here…

  • Ganesh Kudva says:

    Hello Sreekanth,
    Thanks for the detailed post. I really enjoy reading your blog posts.

    I have a query about investing in this scheme. Since I am unable to find any useful info over the internet, I am requesting your assistance. I have the following 2 queries:
    i) Can I fill the form & submit it in any of the Nationalized Banks/ Post office branch in my village?
    ii) Can you kindly elaborate what do you mean when you say “all scheduled commercial banks & designated Post Office branches”? Where can I get this list of designated Post Offices, which will accept my application?
    On the India Post webpage here: http://www.indiapost.gov.in/MutualFunds_POs.aspx, I only see this list of Post Offices which accept MF & Bond applications. Is this list then which accepts this Gold Bond scheme application ?

    Thanks.
    Ganesh

    • Dear Ganesh,
      Yes you can submit. But before doing so just check at your bank/post office branch if they process gold bonds applications?? (Govt may authorize only few post office branches/bank branches to collect the forms and they are referred to as ‘designated or authorized ones’)
      I believe most the bank branches are accepting the forms. (I am not sure about the post office branch list)

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