Sovereign Gold Bond Scheme is a very popular scheme that also became very successful because of its better objectives and aims. This particular scheme was issued by the central government with the goal to reduce the demand for gold in our country which is a very interesting scheme. This scheme also tells us many new things about this sector of gold and provides a large amount of information to those people who are interested in this sector of the scheme. While the Sovereign Gold Bond Scheme is also very necessary and important for our country to become more financially stable by simply participating in this scheme.
Recently this particular scheme with some other very important schemes became a necessary and unique topic because of the Covid-19 pandemic. While those people who became affected by this crisis, especially in the sector related to gold can now also participate in this scheme. Also, the investment in SGBs went up sharply during Covid-impacted years as many different investors just looked for safer options amid volatility in equity markets with 2020-21 and 2021-22 accounting for approximately 75% of total sales of the bonds since the last inception of the scheme in November 2015 when this particular scheme was launched my government.
This Sovereign Gold Bond Scheme was launched in the year 2015 with the single objective of reducing the demand for gold on a very large scale. This scheme was launched by the government of India with the consultation of the Reserve Bank Of India which also issued Sovereign Gold Bonds in tranches for 2022-23. In simple terms this particular scheme was launched to bring the idle gold lying with Indian households into the economy as well as simply to promote FDI in the gold and jewelry sector for the better good is our country. While we are also going to discuss some key points of this scheme in the upcoming paragraphs.
Brief Description of Project
| Name of Scheme | SGB Scheme (Sovereign Gold Bond Scheme) |
| Scheme benefits | It will help our country to maintain the stability of demand for Gold and to reduce India’s over-dependence on gold imports |
| Objective | All the investors have to pay the issue price in cash and the bonds will be redeemed in cash on maturity. The Bond is issued by Reserve Bank on behalf of Government of India. |
Table of Contents
- Major Aims and Objectives Of the Sovereign Gold Bond Scheme
- Benefits Of the Sovereign Gold Bond Scheme
- Key Features of Sovereign Gold Bond Scheme
- Conclusion
Major Aims and Objectives Of the Sovereign Gold Bond Scheme
There are certain aims and objectives which make this scheme one of the best schemes to reduce the demand for gold with some methods which we are going to discuss. This scheme follows the very important and carries vast topics which simply insures the stability of our country financially. The main aim of this scheme is to help reduce India’s over vast dependence on gold imports and simply change the habits of Indians for the better good. While under this scheme all the investors have to pay the issue price in cash and the bonds will be redeemed in cash on maturity. The Bond is issued by Reserve Bank on behalf of the Government of India.
While Sovereign Gold Bond Scheme also insures the arrival of SGBs which are government securities directly denominated in grams of gold and well as they are also considered substitutes for holding any type of physical gold. Under this Sovereign Gold Bond scheme, there are certain bonds that are directly sold through Commercial banks, Stock Holding Corporation of India Limited (SHCIL), as well as under some designated post offices and recognized stock exchanges like the National Stock Exchange of India Limited or Bombay Stock Exchange, which are either directly or through agents for better methods.
Those who want to participate under this Sovereign Gold Bond scheme are also eligible for the bonds that are totally restricted for sale to resident individuals, Hindu Undivided Families (HUFs), trusts, universities, and some major charitable institutions. As they can now easily apply for this scheme by visiting the official website and by simply reading the major instructions which are also directly mentioned in that scheme. While now you might understand the proper methods through which this particular scheme is going to work under the proper guidance from the government of India with the Reserve Bank of India.
As we all know that this Sovereign Gold Bond scheme is very distinctive and required some basic knowledge of investing in physical gold. While this SGB Scheme was also launched in November 2015 and going on since then. While this SGB Scheme is originally launched with the objective to reduce the demand for physical gold which is considered very rare and simply shifting a part of the domestic savings that are usually used for the purchase of gold into major financial savings for better options. There are some key highlights which you can also read because that can simply help you to understand this scheme more easily.
SGB Scheme 2023 Key Highlights
| Portal | SGB Scheme ( Sovereign Gold Bond Scheme ) |
| Launched by | Central Government Scheme |
| Ministry Control | Ministry of Finance |
| Process | Online |
| Year | 2015 |
| Objective | All the investors have to pay the issue price in cash and the bonds will be redeemed in cash on maturity. The Bond is issued by Reserve Bank on behalf of the Government of India. |
| Benefits | It will help our country to maintain the stability of demand for Gold and to reduce India’s over-dependence on gold imports |
| Beneficiary | Gold Investors |
| Official Website | Click Here |
Benefits Of the Sovereign Gold Bond Scheme
There are some very basic benefits that can be gained through this scheme under the sector of simply investing in gold. While there are some disadvantages as well which we are going to discuss in the upcoming paragraphs of this Sovereign Gold Bond scheme. These benefits include better physical gold investments as well as good trades which can be simply gained by applying to this scheme simply by visiting the official website of the SGB Scheme. This scheme installs bonds in the form of trading between the investors which can be used as collateral for loans as well as the capital gains tax arising on redemption of SGB to an individual has been exempted under this scheme.
While on one hand, this scheme provides better and unique investment options, on the other hand, this scheme required a long period of time. So the one and the most basic disadvantage of this Sovereign Gold Bond scheme is that this is a long-term investment that is totally different from physical gold which can be sold immediately and the trading is also very easy to make. While the other disadvantage of this SGB scheme is that the Sovereign gold bonds are listed on an exchange but the trading volumes are not high, therefore it will be difficult to exit before maturity which can cause a huge loss over some physical gold.
As this scheme is also beneficial to those people who are simply new to these trading as well as to do certain investments in gold. While redemption is the act of an issuer repurchasing a bond at or before maturity which is newly launched with this particular SGB scheme and all the capital gain can now be achieved which is the profit earned on the sale of an asset like stocks, bonds, or real estate. That will surely result in when the selling price of an asset exceeding its purchase price and can help us to gain a lot of profit simply through this Sovereign Gold Bond Scheme.
Key Features of Sovereign Gold Bond Scheme
There are certain key features that you must know before investing in this particular SGB scheme because that can provide a huge help for those people who are new to these things. While certain key features of this scheme also directly insures the full priority of profit that you can easily gain from this SGB scheme. These features are also based on the same objective of maintaining or stabilizing the demand of gold investors as well as those people who just want to buy some physical gold under this Sovereign Gold Bond Scheme which was launched in the year 2015 for finding better investors and traders.
As the Gold bond prices in order country under this scheme are linked to the price of gold of 999 purity (24 carats) published by India Bullion and Jewellers Association (IBJA) associated in Mumbai in which those gold bonds can now be easily purchased in the multiples of one unit, up to certain thresholds for simply different investors and traders. While the direct upper limit for retail investors and HUFs is a minimum of 4 kilograms (4,000 units) each per financial year as this also comes under trusts and similar entities, with an upper limit of 20 kilograms per financial year which is mostly applicable with the proper support from our government.
Key Features :
- The investment limit per fiscal year is a minimum of 1 gram and a maximum of 4 kg for individuals, 4 Kg for Hindu Undivided Family (HUF), and 20 Kg for Trusts and similar entities notified by the Government from time to time.
- The Gold Bonds audio bear interest at the rate of 2.50% (fixed rate) per annum on the amount of initial investment.
- The tenor of the bond is for a period of 8 years with an exit option after the 5th year to be exercised on the next interest payment dates.
- Those Gold Bonds will be available both in demat and paper form which can be used as collateral for loans.
- As on maturity, the redemption will be in rupee amount only which would not be a fixed sum but linked to the price of gold.
Other Schemes
You can now easily get all details on different types of schemes that are directly launched by the central government or any other local government for educational purposes for free. As you can visit our official Website Masterpakistan.com for further details and you can now also comment on your request for the particular scheme you want from us.
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Conclusion
I hope after reading a lot of things about this Sovereign Gold Bond Scheme (SGB Scheme) you will get a lot of knowledge and all your queries regarding this scheme are now get solved. But if you still have any queries regarding this scheme then without any hesitation ask us in the comment box given below. We gave hours of research and dedication to make this particular scheme so it is full of informational and educational types.
