SGB 2023-24 Series IV: Get Cheaper 99.99% Gold At Discount, Offer Ending Soon, Check Maturity & Other Benefits

Sovereign Gold Bonds (SGB) are the instruments strongly promoted by the Government of India through the central bank to ensure the general public invests and gains profits from the surging gold demand in India. As per the World Gold Council Report, India is the ninth largest consumer of gold metal, totalling an average of 800 tonnes of yearly gold consumption. Also, it declares the rural Indian middle class to have the highest reserves of physical gold in the entire world currently. The deep-rooted love for precious metals among Indians has led the government to offer virtual or electronic gold to curb the gold metal imports in the country. Recent news reports suggest India's demand for gold has slipped a little despite robust sales witnessed during the major festive season at the record-high price range last year.

According to Mr Nish Bhatt, Founder & CEO, Millwood Kane International on 'Fourth Tranche of Sovereign Gold Bond, "The latest tranche of the Sovereign Gold Bonds Series opens for subscriptions today, 12th February, and will remain available till the 16th February 2024. The issue price of the current series has been set at INR 6,263 per unit by RBI. This makes it a secure avenue for investors seeking exposure to gold. Historically, investors have always looked to Gold for consistent and strong returns. If we look at 2023 alone, despite geopolitical tension, a weaker dollar, and being volatile, Gold is currently traded close to its lifetime high price of 62,240/-, offering approximately 11.95% return in 2024 already. If we look at the long-term, its price has more than doubled in the last 10 years. The SGD (Sovereign Gold Bonds) scheme is an ideal investment opportunity for investors willing to hold on to their investments to seek capital appreciation in the long run."

Mr. Colin Shah, MD, Kama Jewelry on 'Fourth Tranche of Sovereign Gold Bond' says, "With an issue price of Rs 6,263 per gram, the subscription of the 4th tranche of Sovereign Gold Bond launched today is expected to garner major traction. Both household, as well as institutional investors, are increasingly attracted towards this asset class owing to the plethora of benefits that come along with lucrative returns. As the Indian economy resiliently navigates through choppy waters, investments in the SGB tranche are one of the safest harbours for the investors which they can hedge against the headwinds. With India traditionally inclined towards gold for domestic investments, we foresee the behavioural shift in buyers towards SGBs for investment-driven purposes, thus positioning physical gold as a lifestyle statement for adornment purposes."

SGB purchases in India are about to cross previous records as the average yearly procurement of SGB stays around 32 to 33 tonnes. In the financial year 2023-24, within the first nine months, the total purchases for India SGB were 31.4 tonnes. The increased economic growth, financial awareness and push by the Indian government are optimistic enough to expect a robust year for Indian gold bonds. In December alone, 12.1 tonnes of virtual gold was purchased by the country's major cities, with Mumbai gaining the highest demand.

Purchase Pure 999 Gold Units From RBI

Investors looking out for gold investments without any risk or theft issues can invest in SGB 2023-24 4th Series from today till 16th February 2024 or Friday this week. The SGB or India Gold Bonds are offered by the assurance of the Reserve Bank of India (RBI), based on the market value of the 24-carat pure gold. The yellow metal prices today fluctuate as per the national demand and trend, which in turn would be reflected on the MCX Gold Futures along with the trading price of the SGBs on exchanges. Each bond represents a gram of gold metal, which means the price of one SGB is similar to the per gram rate of the yellow metal.

Government Offering Gold Price Discount & Assured Returns

SGBs are offered by the government at a Rs. 50/- per bond discount for investors. The market price of SGB 2023-24 Series IV is currently Rs. 6,263/- per gram, which direct investors can avail of at Rs. 6,213/- per bond through online subscription. The Government of India has offered gold bonds to the general public every year since its launch in early 2016. This month, the SGB 2023-24 series IV application has begun by 12th February and will remain open till 16th February 2024.

Apart from the discount, the RBI assures an interest premium of 2.5% each year, paid twice yearly until bond maturity arrives. The 2.5% interest is calculated based on the market prices, accumulating to more than 10% interest earnings in eight years. The surging consumption and ever-increasing demand for precious metals would push for international spot gold prices to remain stable and indirectly ensure the SGB value maintains its steady upward trend ahead. The last SGB series launched in February had an issue price of Rs. 5,611/- and the last traded value of the bond is Rs. 6,226/-, a 10.9% increase in the bond value, excluding the discount and interest premium earned in 12 months.

The SGB 2023-24 series IV maturity is for eight consecutive years, which dictates that the newly Issued SGB would have expired in the year 2032. One can apply for the India gold bonds online by registering with the RBI website or apply for an SGB 2023-24 subscription online through a broker account. As per the central bank regulation, any individual, a trust, or a HUF is allowed a maximum investment of up to 4 Kg of gold during a financial year. The Income Tax Act of India also allows SGB for tax exemption up to a certain limit, promoting for higher investment from the working middle-income groups.