The central government’s Sovereign Gold Bond Scheme (SGB) – Series VIII will open for subscription today, November 29. The five-day period to buy digital gold during the eighth series of the offer in 2021-22 will close on Friday, December 3. 

This is a central government scheme in which the Reserve Bank of India issues bonds linked to the market price of gold on behalf of the government. The Sovereign Gold Bonds are government securities termed in grams of gold. The scheme was introduced in 2015.

Issue price

The issue price of the Series VIII of SGB has been set at Rs 4,791 per gram. “The nominal value of the bond… works out to ₹4,791 per gram of gold,” the RBI said on Friday.

Sovereign Gold Bonds – How to buy

Sovereign bonds can be bought both offline and online. The bonds will be sold through commercial banks, Stock Holding Corporation of India Limited (SHCIL), Clearing Corporation of India Ltd. (CCIL), designated post offices and recognized stock exchanges like the Bombay Stock Exchange and the National Stock Exchange, the RBi said in a statement.

To buy through digital means, one can apply on websites of the listed scheduled commercial banks.

Discounts for online buyers

The government will offer a discount of Rs 50 per gram on the nominal value (Rs 4,791) to those investors applying online and where the payment against the application is made in digital mode. One bond is equivalent to 1 gram of gold.

 “For such investors, the issue price of the gold bonds will be Rs 4,741 per gram of gold,” the RBI said.

In cash, one can pay up to a maximum of Rs 20,000. You can also pay through demand draft, cheque or electronic banking.

Investment limit

According to RBI guidelines, any individual can invest a minimum of 1 gram and a maximum of 4 kg. Hindu undivided families (HUFs), can buy up to 4 kg and trusts and similar entities 20 kg in a fiscal year (April-March).

The tenor of the bond will be for eight years with an exit option after the 5th year to be exercised on the next interest payment dates. SGB investors get an interest rate of 2.50% per annum payable semi-annually on the nominal value. Individuals are exempted from the tax arising on the redemption of SGBs.