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Saturday, 10 July 2021

Golden opportunity to invest in gold

 Golden opportunity to invest in gold

The fourth series of Sovereign Gold Bonds will start from July 12, 1 gram of gold will be available at Rs 4,807.

                                                     Golden opportunity to invest in gold



The fourth series of Sovereign Gold Bond Scheme 2021-22 will go on sale from July 12 and will continue till July 16. The government has fixed the price at Rs 4,807 per gram. Those who apply online and pay by digital payment will get a discount of Rs 50 per gram.


Gold cheaper than gold bonds in the market

According to the website of the Indian Bullion and Jewelers Association, the price of gold per 10 grams has reached Rs 47,863. This means that the price of sovereign bonds is slightly higher than that of gold this time. Sovereign Gold Bond has a price of 10 grams of gold at Rs 48,070. However this distance is very small.


On what basis are bond prices determined?

The nominal value of the bond is determined on the basis of the average closing price of 999 purity gold between July 7 and 9, the last three trading days of the week, the Reserve Bank said in its notification. The simple average closing price of gold belongs to the Indian Bullion and Jewelers Association Limited (IBJA).


3 out of 6 series have been revealed

Sovereign gold bonds will be issued in 6 installments between May and September, according to information received by the Union Finance Ministry. 3 of them have been released. The first series of Sovereign Gold Bondan ran from May 17 to 21, the second from May 24 to 28 and the third series from May 31 to June 4. Gold was priced at Rs 4,777 per gram in the first series, Rs 4,842 per gram in the second series and Rs 4,889 per gram in the third series.


If you are going to invest in it, first understand what is a Sovereign Gold Bond?

Sovereign gold bonds are government bonds. It can be converted to demat form. It is not valued in rupees or dollars, but in the weight of gold. If the bond is five grams of gold, the value of the bond will be the same as the value of five grams of gold. To buy it, you have to pay the issue price to an authorized broker of SEBI. The bonds are issued by the government through the Reserve Bank of India.


2.50% interest on the issue price

Sovereign gold bonds earn a fixed interest of 2.50% per annum on the issue price. This money is credited to your account every 6 months. That is, an investment of Rs 48,070 will earn Rs 1,215 per annum and a total of Rs 10,630 over 8 years as interest. However, it has to be taxed according to the slab.


What is the maximum amount that can be invested in this series?

A person can buy a bond of value up to a minimum of 1 gram and a maximum of 4 kg in a financial year. Its value is Rs 1.92 crore. However, the maximum purchase limit for the trust is 20 kg. That means a maximum investment of Rs 9.61 crore can be made.


It has a maturity period of 8 years

The maturity period of the bond is 8 years, but investors have the opportunity to exit after 5 years. That means if you want to withdraw money you can withdraw it after 5 years. According to the NSE, this sovereign gold bond can also be used as collateral when taking a loan. Apart from that these bonds also trade on NSE.


No worries about purity and safety

Sovereign gold bonds do not have to worry about purity. According to the National Stock Exchange (NSE), the price of a gold bond is linked to the price of 24 carat gold refined by the Indian Bullion and Jewelers Association. At the same time it can be kept in demat form, which is quite safe and at no cost.


How much tax to pay

Sovereign does not incur any tax on its benefits after a maturity period of 8 years. LTCG (Long Term Capital Gain) tax is levied on the benefit if you withdraw money after 5 years. LTCG is taxed at 20.80%. It also includes cess.


It can be easily purchased


    You need to open a demat account with your broker to buy gold.

    In it you can buy units of Gold ETF available on NSE and the amount will be deducted from the bank account linked to your demat account.

    On investing in the first series, a gold bond will be deposited in your demat account on May 25.


Investments can also be made offline

The RBI has offered several options for investing in the scheme. Investments can be made through bank branches, post offices, stock exchanges and stock holding corporations of India. The investor has to fill up an application form. The money is then deducted from their account. These bonds are transferred to the demat account. It is necessary to provide PAN to invest.


The bonds will be sold by all banks, Stock Holding Corporation of India Limited (SHCIL), select post offices and accredited stock exchanges National Stock Exchange of India Limited (NSE) and Bombay Stock Exchange Limited (BSE).


How appropriate is it to invest in it?

According to Pankaj Mathpal, a personal finance expert and founder and CEO of Optima Money Managers, this may be the right time if you want to invest in gold as it can give a good return in the time to come amid the Corona epidemic. According to him, over the last 10 years, gold has returned an average of 10 to 11% per year. Investing in gold for a long time will be beneficial.

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Limited investment in gold is beneficial

Even if you like to invest in gold, you must invest in it limited. According to experts, only 5 to 10% of the total portfolio should be invested in gold. Investing in gold in times of trouble can bring stability to your portfolio and in the long run it can reduce your portfolio returns.

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