First tranche of Sovereign Gold Bonds 2021-22 opens for subscription; here’s all you need to know

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The first tranche of Sovereign Gold Bonds 2021-22 will be open for subscription for five days from May 17 to May 21. The bonds will be issued in six tranches from May 2021 to September 2021. The Gold Bonds under this Scheme may be held by a Trust, HUFs, Charitable Institution, University or by a person resident in India, being an individual, in his capacity as such individual, or on behalf of minor child, or jointly with any other individual.

Issuance calendar

Here are key things you must know about the scheme:

Nominal value The nominal value of the bond based on the simple average closing price works out to Rs 4,777 per gram of gold. The government, in consultation with the RBI, 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 4,727 per gram of gold.

Minimum limit Minimum subscription limit is capped at 1 gram of gold. The maximum limit of subscription is 4 kg for individual, 4 kg for HUF and 20 Kg for trusts and similar entities per fiscal (April-March). The Gold Bonds shall be issued in the form of a stock certificate and shall be eligible to be converted into demat account.

Interest rate The interest on the Gold Bonds shall commence from the date of issue and shall be paid at a fixed rate of 2.50% per annum on the nominal value of the bond. The interest shall be payable half-yearly and the last instalment of the interest shall be payable along with the principal on maturity.

Tenor The tenor of the bonds is for a period of 8 years with an exit option after the fifth year to be exercised on the next interest payment dates.

Where can you buy? One can buy these gold bonds from scheduled commercial banks, except small finance banks and payment banks, Stock Holding Corporation of India Ltd, designated post offices, and recognised stock exchanges — National Stock Exchange of India and the Bombay Stock Exchange.