This Dhanteras, buy cheaper gold using a government scheme

This Diwali and Dhanteras, don't miss this 'gold'en opportunity to earn some great returns while avoiding rushing to a jewellery shop amidst a pandemic.

Dhanteras is around the corner and it is time for people to buy metal, especially gold.

However, with record-high gold prices and the ongoing COVID-19 pandemic, you might not want to rush to the nearest jewellery shop.

Instead, this Dhanteras and Diwali, you can opt for a better and risk-free alternative — the Sovereign Gold Bond 2020-21, issued by the Reserve Bank India (RBI) on behalf of the government.

The Sovereign Gold Bond Scheme (SGB), launched in November 2015, aims to reduce the demand for physical gold and promote financial savings.

More for investment purposes, these bonds yield great interests as SGB has an interest rate of 2.50 percent every year on top of gold price return value, which simply means that the buyer will get incentives for investing in the bond.

The bond comes with a maturity period of eight years. However, it also has an exit option after five years. To redeem the SGB, a subscriber needs to inform the bank to process it. Investors also have the option to sell these bonds on stock exchanges. 

According to RBI’s Annual Report 2019-20, Rs 9,652.78 crore (30.98 tonnes) has been raised through the Sovereign Gold Bonds Scheme (37 tranches) since its inception. The central bank has so far issued 10 tranches of Sovereign Gold Bonds (SGBs) for Rs 2,316.37 crore (6.13 tonnes) during 2019-20.

This is the VIII Series of Sovereign Gold Bonds 2020-21, available at the fixed price of Rs 5,177 per gram of gold. These bonds are open for subscription from November 9 to 13, 2020.

And considering COVID-19’s impact on the economy and people’s income, RBI is also offering a discount of Rs 50 per gram to those investors applying online and the payment against the application is made through digital mode.

In a statement, RBI said, "For such investors, the issue price of Gold Bond will be Rs 5,127 per gram of gold.”

The minimum permissible investment is 1 gram of gold and the maximum limit of subscription is 4 kg for individuals, and 20 kg for trusts and similar entities per fiscal or between April and March.

So, don't miss this golden opportunity to earn some great returns!

Edited by Saheli Sen Gupta