Details Of GOI – Sovereign Gold Bonds 2015:

Recently Govt have announced about developing a financial asset – sovereign Gold Bonds – as an alternative to purchasing Gold in physical form.Prime Minister Shri Narendra Modi will launch the Gold bond Scheme on Nov 05, 2015.

Few details of Gold bonds are as follows:

1. Basis of Gold Bond price issuance :Gold bonds will be issued on a basis of previous week’s simple avg of 999 purity gold prices ( on closing basis ) published by IBJA – Indian Bullion and Jewelers Association.
2. Imp Dates :Gold bonds will be issued in one or more tranches.First tranche will open from Nov 05 to Nov 20 , 2015 and Gold bonds will be issued on Nov 26,2015.
3. Minimum subscription : 02 Grams and max subscription is 500 grams p.a. per investor.
4.  Interest payable -@ rate of 2.75% p.a.and interest payable semi annually.Interest will be paid based on initial value of investment.
5. Gold Bond Holding :Bonds can be held in demat or physical form and can be traded at exchanges.
6. Maturity period : 08 yrs from date of issuance.
7. Premature redemption : possible from 05th year on wards on any coupon payment date.
8. It is mandatory to provide bank a/c details to facilitate interest payment and maturity value.If gold bonds held in demat account, then interest / maturity amount will be credited in account linked to demat account.
9. Gold bonds can be used as collateral for loans – similar to physical gold.Loan to value ratio as decided by RBI time to time.
10. Maturity / redemption price will be on the basis of previous weeks simple avg 999 pure gold closing prices.

Basic idea behind Gold bonds is to reduce physical gold imports from foreign countries.Additional benefit available for Gold bonds is in terms of Interest paid.

If any one is bullish on gold over a longer period of time or need gold in physical form only after few years ( assume physical gold  purchased from maturity / redemption amount )  can think about Gold bonds over physical gold.Forms available and can be submitted at nationalized,scheduled commercial banks and designated post office branches.