Introduction
The Sovereign Gold Bond (SGB) Scheme is a government initiative aimed at providing an alternative investment avenue for individuals who are interested in owning gold. These bonds are issued by the Save Bank of India (RBI) on sake of the Government of India. The SGB Scheme Series – III is the latest offering in this series, providing investors with an opportunity to invest in gold in a secure and convenient manner.
Features of the SGB Scheme Series – III
The SGB Scheme Series – III has several attractive features that make it an appealing investment option:
- Issue Price: The issue price of SGB Scheme – III series is fixed on the average closing price of 999 pure gold published by the Indian Jewelery and Bullion Association Ltd. (IBJA) for three working days a week. Before the subscription period, this ensures that the investors get a fair return on investment.
- Benefits: SGB Scheme Series – III offers an annual interest rate of 2.50% of the principal investment. Interest is credited to the depositor’s bank account every six months.
- Duration: The duration of SGB Scheme Series – III is 8 years, with the option ending after the fifth year. Investors can also leave this plan early under certain circumstances, such as the death of the investor.
- Investment: The minimum investment in the SGB – III scheme is 1 gram of gold, with a maximum limit of 4 kg for individuals and Unaffiliated Hindu Families (HUFs) and 20 kg for trusts and similar entities.
- Security: SGB Scheme Series – III gives investors the benefit of holding gold without the need for physical storage. Bonds are held in demat form and eliminate the risk of theft or loss.
Benefits of Investing in the SGB Scheme Series – III
Investing in the SGB Scheme Series – III offers several advantages:
- Capital Appreciation: Gold has historically been considered a safe investment, with the potential for long-term capital appreciation. By investing in the SGB Scheme Series – III, investors can benefit from the increase in the value of gold over time.
- Regular Income: The annual interest rate of 2.50% offered by the SGB Scheme Series – III provides investors with a regular income stream, in addition to the potential capital appreciation.
- Tax Benefits: Tax benefits: The interest earned in the SGB Series – III scheme is taxable as per the tax bracket of the investor.
- Liquidity: The SGB Scheme Series – III allows investors to exit the scheme after the 5th year, providing them with liquidity if required. Premature exit is also possible under certain circumstances, ensuring flexibility for investors.
- Convenience: Investing in the SGB Scheme Series – III is a hassle-free process, with the bonds being issued in the demat form. Investors can apply for the bonds through designated banks, post offices, and stock exchanges.
