The Sovereign Gold Bond Scheme 2020-21 – Series IX will be open for subscription for the period from December 28, 2020 to January 01, 2021. The nominal value of the bond based on the simple average closing price [published by the India Bullion and Jewellers Association Ltd (IBJA)] for gold of 999 purity of the last three business days of the week preceding the subscription period, i.e. December 22 – 24, 2020 works out to Rs.5,000/– (Rupees five thousand only) per gram of gold.
Government of India, in consultation with the Reserve Bank of India, has decided to offer a discount of Rs.50/- per gram less than the nominal value to those investors applying online and the payment against the application is made through digital mode. For such investors, the issue price of Gold Bond will be Rs.4,950/- (Rupees four thousand nine hundred fifty only) per gram of gold.
These bonds are a substitute for holding physical gold. Each of those tranches will be kept open for a specified period for investors to buy through banks, Stock Holding Corporation of India Limited (SHCIL), designated Post Offices and recognized Stock Exchanges viz., National Stock Exchange of India Limited and Bombay Stock Exchange. The holder of an SGB can also borrow against the security of SGB or offer it as collateral security for any loan. Banks can create a pledge, hypothecation, or lien against the security (in accordance with the provisions of section 28 of the G-Sec Act 2006/ chapter VII of G.Sec Regulations, 2007) without any restriction.
To know the benefits if compared to the physical form of gold with regard to elimination of holding risk, price advantage over market price, interest on your investment, Tax Benefit, Loan facility against security of gold bond, Denomination of bonds, Risk factor, nomination facility, etc., read, the below post.