Purchasing SGBs on Final Day of Subscription Explained

According to the Reserve Bank of India (RBI), the country’s central bank, investors will receive Sovereign Gold Bonds (SGBs) on February 21, with an interest rate of 2.50 percent paid semi-annually.

The subscription for the fourth and final tranche of the Sovereign Gold Bond (SGB) Scheme for the fiscal year 2023-24 is set to close on Friday (February 16). These bonds are available at an issue price of Rs 6,263 per gram, with buyers having the option to avail a Rs 50 discount through the purchase of digital gold online.

One of the main attractions of SGBs is the interest they offer, along with savings on making charges, locker rent, and other costs associated with physical gold. The RBI has set the interest rate for these bonds at 2.50 percent, paid semi-annually, providing investors with a regular income stream. Initially, the interest rate was set at 2.75 percent. The accrued interest will be directly credited to the investor’s bank account.

Like any investment, SGBs come with their own set of risks, primarily the potential for capital loss if gold prices decline. However, in such cases, investors do not lose in terms of the units of gold but only in monetary value.

Purchasing SGBs on the final day is available through the RBI’s retail direct website, digital gold platforms such as Stock Holding Corporation of India Limited (SHCIL) and recognized stock exchanges, as well as via net banking or mobile banking applications. Physical purchases can be made through bank branches or designated post offices by filling out the necessary forms and making payment via cheque or demand draft. Beyond the subscription window, investors can explore primary issuances in the secondary market.

Multiple options are available for selling SGBs, including scheduled commercial banks, post offices, and stock exchanges.