Investors keen on diversifying their portfolios with gold-backed securities must be flocking to subscribe to the fourth tranche (IVth) of the Sovereign Gold Bond (SGB) scheme for the financial year 2023-24. The subscription window is open until February 16, offering last chance for investors to participate in this financial year's SGB offering.
However, online subscribers get a discounted rate of ₹50 per gram, making their investment cost ₹6,213 per gram.
The issuance of these bonds is scheduled for February 21.
Price history and returns
The price history of SGB for FY 2023-24 is as follows:
Series | Month | Price per gram |
Series 1 | June 2023 | ₹5,926 |
Series 2 | September 2023 | ₹5,923 |
Series 3 | December 2023 | ₹6,199 |
(Source: Cleartax)
Comparatively, the previous financial year (2022-23) showcased the following price trends:
Series | Month | Price per gram |
Series 1 | June 2022 | ₹5,041 |
Series 2 | August 2022 | ₹5,091 |
Series 3 | December 2022 | ₹5,409 |
Series 4 | March 2023 | ₹5,611 |
(Source: Cleartax)
According to Paytm Money data as of December 18, 2023, returns for the some of the SGB tranches are as follows:
| Tranche | Year | Returns till Dec 18 | Annualised returns |
| Series 1 | 2023-24 | 4.60% | 9.80% |
| Series 2 | 2023-24 | 3.90% | 16.90% |
| Series 4 | 2022-23 | 9.90% | 13.20% |
| Series 3 | 2022-23 | 19.10% | 14.40% |
It's crucial to note that SGBs have an eight-year maturity period. It provides investors with a secure and sovereign-backed option.
SGBs distinguish themselves from physical gold as they offer potential price appreciation and generate income through interest payouts.
Investors receive a 2.5% interest rate, making SGBs a compelling choice for those seeking a combination of steady returns and exposure to the gold market.
Experts recommend SGBs for gold-oriented investments or individuals interested in a Systematic Investment Plan (SIP).
The bonds cater to both larger investors, allowing substantial investments up to 4 kgs, and retail investors, who can start with as little as 1 gram.
Nish Bhatt, Founder & CEO of Millwood Kane International, emphasised the security and historical performance of SGBs.
He said, "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 SGB scheme is an ideal investment opportunity for investors willing to hold on to their investments to seek capital appreciation in the long run."
Colin Shah, MD of Kama Jewelry, anticipated significant interest in the current tranche, citing the attractive benefits and returns.
Ways to buy SGBs
Investors can buy gold bonds from commercial banks. They can visit a bank branch or designated post office physically and fill out the form along with units and submit it along with a Cheque or DD to make payment.
Investors can also buy gold bonds from Stock Holding Corporation of India Limited (SHCIL) and recognised stock exchanges.
Online investors can even buy via net banking or through mobile application of the bank.
Additionally, SGBs are available via RBI's retail direct website
Moreover, investors can explore primary issuances in the secondary market beyond the subscription window.
First Published: Feb 13, 2024 9:22 AM IST
