Sovereign Gold Bond Scheme 2023-2024 Series II: All you need to know

| Leave a Comment | Personal Finance

The Reserve Bank of India (RBI) has announced that the Sovereign Gold Bond Scheme 2023-2024 Series II will open on September 11, 2023. The price of the bond has been fixed at Rs 5,923 per gram of gold. Investors making payment through digital means will get an additional discount of Rs 50 per gram, bringing the effective price down to Rs 5,873 per gram.

The scheme is open to all investors, including individuals, Hindu Undivided Families (HUFs), trusts, and institutions. The minimum investment is one gram of gold and the maximum is 4 kilograms in a fiscal year. The bonds have a tenure of eight years and can be redeemed after the end of the fifth year.

The bonds offer an interest rate of 2.5% per annum, payable half-yearly. The interest is taxable in the hands of the investor. The capital gains, however, are tax-free if the bonds are held till maturity.

SGBs are considered a safe investment option as they are backed by the government. They also offer diversification benefits to investors’ portfolios. However, it is important to note that the bonds are not as liquid as physical gold.

Here are some things to keep in mind before investing in SGBs:

  • The price of SGBs is linked to the price of gold. So, if the price of gold goes up, the value of your investment will also go up. And vice versa.
  • The interest rate offered on SGBs is lower than the interest rates offered on other investment options such as fixed deposits and savings accounts.
  • SGBs are not as liquid as physical gold. It may be difficult to sell your SGBs quickly if you need the money.

Overall, SGBs can be a good investment option for investors who are looking for a safe and secure way to invest in gold. However, it is important to do your research before investing and to understand the risks involved.

Here are some expert views on the gold market:

  • Chirag Mehta, Chief Investment Officer, Quantum Mutual Fund, expects gold prices to be rangebound in the near term. He says that the upside is limited in the wake of worries about Fed overtightening, a potential US recession, rising US debt levels, sticky inflation, central bank gold buying and geopolitical tensions.
  • Aamir Makda, Commodity & Currency Analyst, Choice Broking, says that the global inflation scenario is likely to remain stagnant, which will pull the gold price higher in upcoming months. He expects the gold prices to touch Rs 64,000-68,500 per 10-gram mark in the next one-two years.
  • Parul Maheshwari, a Mumbai-based certified financial planner, says that SGBs are more tax-efficient for long-term investors. She says that capital gains booked in units of gold ETFs and gold funds acquired after April 1, 2023, are taxed as per tax bracket of the investors, making these vehicles tax-inefficient. SGBs, on the other hand, have zero capital gains if held till maturity.

Related News

  • 18 Sep

    CBDT Amends Valuation Rules for Accommodation Perquisite, Effective September 1, 2023

    The CBDT has amended the valuation rules for accommodation perquisite, effective September 1, 2023. The key changes are: Lower perquisite rates and revised city categorization. Introduction of Cost Inflation Index (CII) to cap the perquisite valuation for subsequent years. Change in plinth area and definition of remote work: Temporary accommodation provided to employees at select sites will not be taxable as a perquisite if it meets certain conditions. The amendments are expected to benefit employees, especially those working in remote areas.

  • 14 Sep

    Roshi Jain steps into Prashant Jain’s shoes at HDFC AMC

    Roshi Jain has taken over the reins of HDFC Flexi Cap Fund, one of the largest equity-oriented schemes in India. She has made some subtle changes to the portfolio, such as reducing exposure to the energy and consumer staples sector and increasing allocations to the IT and pharmaceutical sectors. She is confident that she can continue the success of the fund under her leadership.

  • 13 Sep

    Nifty 50 hits 20,000: Underweight stocks that delivered big gains

    The Nifty 50 index crossed 20,000 on Sep 11, 2023. Half of the stocks in the index doubled in 3 years. Stocks with significant weight grew notably, but some underweight stocks gained significantly too. Top 10 underweight stocks with highest returns: Tata Motors (+340%), Apollo (+216%), JSW Steel (+186%), Hindalco (+171%), NTPC (+170%), Grasim (+158%), Adani Ports (+157%), ONGC (+150%), IndusInd Bank (+138%). Past performance is not a guarantee of future results.

  • 12 Sep

    Retail participation in the stock market is decreasing, but overall market traded volume is increasing.

    Retail participation in Indian stock market decreases, but overall traded volume increases. Investors should focus on long-term investing and do their research. Here are the key points from the article: Retail participation in cash/spot segment decreases from 45% to 36.5%. This is likely due to COVID-19, market volatility, and proprietary trading. Overall market traded volume increases. Investors should focus on long-term investing and do their research.

  • 11 Sep

    SEBI’s move to allow 6 new ESG fund categories may confuse investors

    SEBI has allowed asset management companies to launch up to 6 new ESG fund categories. These funds will invest in companies that are considered to be environmentally and socially responsible. However, some experts believe that this may confuse investors, who are already overwhelmed with the multitude of fund categories and schemes that are available. Investors should carefully consider their investment goals, risk appetite, and time horizon before investing in any ESG fund.

Leave a Reply

Your email address will not be published. Required fields are marked *