The subscription for the second tranche of the Sovereign Gold Bonds (SGBs) scheme, the 2022-23 Series II, opens on Monday, August 22, and will close on Friday, August 26. The SGBs will be allotted on August 30.

This is a great opportunity for you to invest in gold. SGBs are government securities denominated in grams of gold. These are substitutes for holding physical gold. SGBs are issued by the central bank on behalf of the Government of India. Investors have to pay the issue price in cash and the bonds are redeemed in cash on maturity.

11 Golden Reasons to Invest in Sovereign Gold Bonds (SGBs)

There are many reasons for buying gold. The yellow metal acts as a hedge against inflation. It is a relatively stable investment compared with equities. It is a good diversification strategy. It can be purchased easily. You know all that. We now give you more reasons if you buy gold in the form of SGBs.

  1. SGBs carry a fixed interest rate of 2.50% per annum on the amount of the initial investment. Interest is credited semi-annually to the bank account of the investor.
  2. You can easily purchase SGBs online through Sharekhan and hold the bonds in Demat form.
  3. SGB prices are linked to the price of gold of 999 purity published by the India Bullion & Jewellers Association (IBJA).
  4. Investing in SGBs eliminates the risk of theft and the cost of storage.
  5. Investors are assured of the market value of gold at the time of maturity and periodical interest.
  6. SGBs are free from issues like making charges and purity associated with the purchase of gold in jewelry form.
  7. These bonds are tradeable on the Exchanges.
  8. SGBs have a tenure of eight years; early encashment/redemption of the bonds is allowed after the fifth year.
  9. Interest on SGBs is taxable but the capital gains tax arising on redemption of the bonds is exempted for individuals.
  10. SGBs can be used as collateral for loans.
  11. Sovereign gold bonds carry the sovereign guarantee as these are issued by the Reserve Bank of India on behalf of the Government of India.

2022-23 Series II SGB issue details Offer period

Offer period Aug 22 to August 26 (the bonds will be issued on August 30, 2022)
Issue price Rs 5,147 (per gram of gold)
Maturity Eight years with an exit option from the fifth year to be exercised on interest payment dates; these bonds will be eligible for trading from the date as notified by the RBI
Subscription limits for individuals A minimum of 1 gram of gold and a maximum of 4 kilograms of gold per person in a fiscal (the April-March period); available in units of 1 gram of gold and multiples thereof
Subscription limits for trusts and other institutions A minimum of 1 gram of gold and a maximum of 20 kilograms of gold per institution in a fiscal (the April-March period); available in units of 1 gram of gold and multiples thereof
  • The interest on SGBs shall be taxable as per the provision of the Income Tax Act, 1961 (43 of 1961).
  • Individuals are exempted from paying the capital gains tax arising on redemption of SGBs.
  • The indexation benefits will be provided to the long-term capital gains arising to any person on the transfer of the bonds.

SGB issuance calendar for 2022-23

Sr. No. Tranche Date of Subscription Date of Issuance
1 2022-23 Series I June 20 to 24 June 28
2 2022-23 Series II Aug 22-26, 2022 Aug 30

Also Read: Top High Paying Dividend Stock of 2022

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