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09/01/21 10:00 AM IST

Sovereign Gold Bond Scheme 2020-21

In news

The issue price for the Sovereign Gold Bond has been fixed at Rs 5,104 per gram of gold.

Sovereign Gold Bond (SGB)

  • SGBs are government securities denominated in grams of gold.
  • They are substitutes for holding physical gold.
  • 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.
Benefits
  • The quantity of gold for which the investor pays is protected, since he receives the ongoing market price at the time of redemption/ premature redemption.
  • The SGB offers a superior alternative to holding gold in physical form. The risks and costs of storage are eliminated.
  • Investors are assured of the market value of gold at the time of maturity and periodical interest.
  • SGB is free from issues like making charges and purity in the case of gold in jewellery form.
  • The bonds are held in the books of the RBI or in demat form eliminating risk of loss of scrip etc.
Source: The Hindu & PIB

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