The government has announced that the first tranche of the Sovereign gold bonds (SGB) will open for public subscription on April 24. The issue price of the bonds has been fixed at Rs 50 per gram, less than the stated value of gold and the bonds would earn an interest of 2.75 per cent every year, payable every six months on the initial investment, the finance ministry said in a statement.
“Applications for the bond will be received from 24th to 28th April 2017. The Sovereign gold bonds will be issued on 12th May 2017,” the statement added. The tenor of the bond will be for eight years with exit option from the fifth year to be exercised on the interest payment dates.
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“The price of bonds will be fixed in Indian Rupees by the simple average of closing price of gold of 999 purity is published by the India Bullion and Jewellers Association for the week (Monday to Friday) preceding the subscription period. The issue price of the gold bonds will be Rs 50 per gram less than the suggested value,” it said.
The minimum investment limit into these Sovereign gold bonds as announced is 1 gram of gold, while the maximum amount subscribed by an entity is not more than 500 grams per person per financial year. People can avail these bonds through banks, post offices, Stock Holding Corporation of India (SHCIL), and recognised stock exchanges such as National Stock Exchange (NSE) and Bombay Stock Exchange (BSE).
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