Reserve Bank Of India on behalf on Govt Of India will issue first series ( Tranche IV )of Gold bonds in financial year 2016-2017.This Gold bond issue will open on July 18, 2016.
Features of Gold bonds are as follows:
- Issue open date: July 18, 2016.
- Issue close date: July 22, 2016.
- Issue Price: INR.3119 per Gram of Gold.
- Tenure:Tenure is 8 yrs but there will be exit option from 5th year which can be exercised on interest payment date.
- Minimum size: 1 unit (Gram) of gold & in multiples of 1 Gram thereafter.
- Maximum size : 500 Grams per individual in financial year.
- Interest rate:Fixed rate of 2.75% p.a. payable semi-annually on initial value of investment.
- Redemption value:Redemption price will be in INR based on previous weeks simple average of closing price of Gold of 999 purity published by IBJA – Indian Bullion & Jewelers Association.
- Taxation:Interest received semi-annually will be taxable.Capital Gains arising on redemption of Gold bonds has been exempted.On transfer of bonds,indexation benefit will be provided to long term capital gains.
- Collateral : Gold bonds can be used as collateral for loans.Loan to Value ration will be as mandated by RBI time to time.
- Tradability : Gold bonds are tradable at exchanges from date notified by RBI.
- There is no physical Gold involved in entire process.Redemption value will be in terms of INR.
How to apply for Gold Bonds:
Investor along with KYC document can visit banks,post office or stock broker for application form.If in past you have invested in Gold bonds,then you will need to enter RBI investor ID.
Should you invest in Gold bonds?
Its impossible for any one to guess Gold prices after 5+ years as its function of both core prices & currency.But,Gold bonds can be preferred over physical gold.If requirement of physical gold is after 5+ years then consider investing in gold bonds.Investor will get interest as well there won’t be any storage risk.
