Sovereign Gold Bonds (SGBs) are substitutes to physical gold and are government securities denominated in the yellow metal. Investors of SGBs are given a holding certificate. The tenor of the SGB is eight years, however, if the investors want to withdraw the bond before this period, then the facility is available after the fifth year from the date of issue on coupon payment dates. If the bond is held in the demat form, it is tradable on exchanges or the sovereign gold bond can be transferred to any other eligible investor.
Those who have invested in sovereign gold bonds can approach their agent, bank, post office or Stock Holding Corporation Of India Limited (SHCIL) office in case of premature redemption. As per the Reserve Bank of India, SGB investors should submit a request for redemption at least one day before the coupon payment date otherwise it will not be entertained.
Finally, the investor will get the proceeds into their bank account which they had used at the time of applying for the bond.
If the Sovereign Gold Bonds are allowed to mature, they can be redeemed in rupees. The investors of the SGBs are notified a month before the maturity of the bond. The redemption price is based on the average of the closing price of 999 purity gold in the last three business days. The closing price published by the India Bullion and Jewellers Association Limited is considered for this.
Upon maturity, the proceeds are given to the investors. They are credited to the bank account mentioned in the records of the SGB investor. Investors are advised to notify the bank/SHCIL/PO if there is any change in their personal details such as their contact number, account number or email address.
Currently, the issue price has been fixed at Rs 5,104 per gram of the gold for the 10th instalment (series X) of SGB scheme for 2020-21. The online subscribers can get a discount of Rs 50 per gram for the ongoing instalment of the SGB scheme.
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