Sovereign Gold Bond scheme: Here's how to buy gold at the lowest rate ahead of Dhanteras and Diwali

Ahead of Dhanteras and Diwali, the eighth tranche of Sovereign Gold Bond 2020-21, which is issued by the Reserve Bank India (RBI) on behalf of the government, will open for subscription on Monday (November 9). The Sovereign Gold Bond Scheme 2020-21-Series VIII will be opened for subscription from November 9 to 13, 2020.

The Reserve Bank of India in a statement said that the issue price for the Sovereign Gold Bond has been fixed at Rs 5,177 per gram of gold. "The nominal value of the bond based on the simple average closing price [published by the India Bullion and Jewellers Association Ltd (IBJA)] for gold of 999 purity ... works out to Rs 5,177 per gram of gold," the RBI said.

It further said 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 5,127 per gram of gold," the central bank said.

Sovereign Gold Bond 2020-21 is issued by Reserve Bank India on behalf of the Government of India. The bonds are restricted for sale to resident individuals, HUFs, Trusts, Universities, and Charitable Institutions. The minimum permissible investment will be 1 gram of gold and the maximum limit of subscription shall be 4 KG for individuals, 4 Kg for HUF, and 20 Kg for trusts and similar entities per fiscal (April-March).

The gold bond will be sold through banks (except Small Finance Banks and Payment Banks), Stock Holding Corporation of India (SHCIL), designated post offices, and recognised stock exchanges (NSE and BSE). The sovereign gold bond scheme was launched in November 2015 with an objective to reduce the demand for physical gold and shift a part of the domestic savings -- used for the purchase of gold -- into financial savings.

Here are 5 things to know about RBI's Sovereign Gold Bond 2020-21:

1. A discount of Rs 50 per gram will be available for those investors applying online and the payment against the application is made through digital mode.

2. For such investors, the issue price of the gold bond will be Rs 5,127 per gram of gold.

3. The bonds are denominated in multiples of gram(s) of gold with a basic unit of 1 gram and the minimum permissible investment is 1 gram.

4. The bonds are restricted for sale to resident individuals, HUFs, Trusts, Universities and Charitable Institutions.

5. Gold bonds have a maturity period of eight years with an exit option after the fifth year. The redemption price is based on the then prevailing price of gold.

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