Sovereign Gold Bond: Investors in the Sovereign Gold Bond (SGBs) issue in March 2016 can now redeem premature bonds (Sovereign Gold Bond Scheme 2016 – Series II).
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There is good news for those investing in the government’s Sovereign Gold Bond scheme. Investors in the Sovereign Gold Bonds (SGBs) issue in March 2016 can now redeem premature bonds (Sovereign Gold Bond Scheme 2016 – Series II).
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The Reserve Bank of India (RBI) fixed the price of the Sovereign Gold Bond issue of March 2016 at Rs 2,916 per gram. The central bank is giving permission to redeem at Rs 4,491 per gram. Investors who invested money in this scheme 5 years ago are getting 54 percent return.
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According to the regulations, the tenure of SGB is 8 years, but investors can redeem it prematurely on completion of 5 years. Gold is invested in a multiple of one gram in Sovereign Gold Bond. At that time, the minimum investment size in the gold bond scheme was two gram units, which is equivalent to 2 grams of gold. Now at least one gram of gold can be purchased in it.
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The government started the Sovereign Gold Bond Scheme in the year 2015. The first installment was open for subscription between 5 November 2015 and 20 November 20. At that time the bid for 9,15,953 grams of gold was received, which was worth Rs. 246 crores. After better response from investors, the government decided to sell SGB regularly.
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The government is selling Sovereign Gold Bonds every month in the current financial year. This month the Gold Bunch was open for subscription on 1 March and closed on 5 March. Its one unit was priced at Rs 4,662.
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According to experts, Sovereign Gold Bond is the best way to invest in gold. There is no transaction cost, storage cost and SGB gets 2.5 percent return every year.
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A person can buy a bond equal to 4 kg. Investors can also take loans against sovereign gold bonds. There is no capital gains tax on these bonds on redemption. They are also listed on stock exchanges, where investors can sell them.
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