« Calculating Minimum Salaries for Indian Expats Looking to Shift Abroad Maximizing Your Finances: Smart Moves for Your Tax Refund Windfall in India »

Sovereign Gold Bond (SGB) 2023-24 (Series II): Who Should Invest?

Posted on 11 Sep 2023
Author: Sayan Sircar

Tags: Gold

6 mins read
Get new post notifications on WhatsApp!

Sovereign Gold Bond (SGB) 2023-24 (Series II): know all the details about it to decide if you should invest.

Sovereign Gold Bond (SGB) 2023-24 (Series II): Who Should Invest?

📚 Topics covered:

What is a Sovereign Gold Bond?
What is Sovereign Gold Bond (SGB) 2023-24 (Series II)?
How to purchase Sovereign Gold Bond (SGB) 2023-24 (Series II)?
Does SGB give good return?
Who should purchase SGB?
How does this SGB issue price compare with the previous series prices?

What is a Sovereign Gold Bond?

A Sovereign Gold Bond (SGB) is a piece of paper issued (in digital form) by the Government of India with the following features. For every unit of SGB purchased, the investor will:

buy it when issued at the current price of 1 gram of gold
get 2.5% interest (paid as 1.25% every six months; fully taxable at slab rates) on the invested amount
get back money as per the prevailing price of gold in eight years. Money received may be higher or lower than the purchase price and cannot be predicted in advance
if desired, sell it via the stock exchange five years after issuance
there are no capital gains taxes if held until maturity for eight years. Else, you will need to pay taxes based on the holding period

To know more about SGB as an investment, please read this list of detailed SGB-related FAQs: Frequently asked questions on Sovereign Gold Bonds (SGB): the complete guide.

Recent articles:

1 / 3

<p>A quick retirement calculation for a reader query who has a good amount of corpus already saved for retirement.</p>

2 / 3

<p>This article explains the PFRDA announcement about a new default scheme under NPS Tier II for government employee subscribers.</p>

3 / 3

<p>As per SEBI rules, mutual fund investors must have nominees in their folios by 1st October 2023 or explicitly opt out. Otherwise they will face restrictions in selling units.</p>

❮ ❯

Join the Arthgyaan WhatsApp community: You can stay updated on our latest content and learn about our webinars. Our community is fully private so that no one, other than the admin, can see your name or number. Also, we will not spam you.

What is Sovereign Gold Bond (SGB) 2023-24 (Series II)?

SGB is issued by the RBI periodically. This particular series or tranche is called Sovereign Gold Bond (SGB) 2023-24 (Series II). These are the details of this particular series:

Subscription period: Mon, Sep-11 to Thu Sep-15, 2023
1 unit of SGB is priced at the average closing values of the IBJA website 1gm of 999 purity gold rate from the last 3 working days of previous week
Offer price: ₹5923 per gram
Retail discount: ₹50 per unit of SGB for online application and digital payments
Price per unit for online subscription: ₹5873
IBJA closing price in the previous week: ₹5929 per gram
2.5% annual interest (paid at the rate of 1.25% on ₹5923 every 6 months) will be received per unit. This interest is taxable
SGB purchased in this tranche will mature in 8 years and the maturity proceeds will be tax-free
SGB can be purchased only by resident Indians but not by NRIs

The complete press-release is available here.

How to purchase Sovereign Gold Bond (SGB) 2023-24 (Series II)?

SGB is offered for purchase via most banks, post offices, stock exchanges like NSE/BSE (a demat account is needed) or via the Stock Holding Corporation of India Ltd (SHCIL).

If you have not invested in this tranche via the options above, you can buy SGB from the secondary market i.e. the stock exchange: How to buy SGB from the stock market?.

Does SGB give good return?

SGB gives you the exact return of gold price movement (as measured by the IBJA rate of 999 purity gold) that too tax-free plus 2.5% interest.

There are 3 main ways of buying gold in India:

physical gold in the form of coins / bars
gold mutual fund or ETF: How to choose a gold mutual fund?
Sovereign Gold Bond (SGB): Frequently asked questions on Sovereign Gold Bonds (SGB): the complete guide

Of these three options, SGB gives the highest return in case you buy gold as SGB: The Ultimate Guide to Which Type of Gold Gives the Best Returns.

The actual return from holding SGB will depend on the price of gold on the maturity date 8 years later and is completely unpredictable. RBI will guarantee that if you invest ₹5923 in this tranche today, you will get the 6-monthly interest but the money you will get will depend again on the IBJA gold rates at that time.

Who should purchase SGB?

We see the following use cases for purchasing SGB:

if you are accumulating gold for making jewellery on a later date: instead of buying physical gold, you can buy SGB that matures around the time you plan to buy jewellery
if you are planning to invest in gold as a part of portfolio diversification purpose: as we have argued in this article on adding gold to a portfolio, a small amount of gold added to a portfolio of stocks and bonds has diversification benefits
if you are looking for a low cost way to get exposure to gold as an asset class: since SGB is a purely digital instrument, guaranteed by the government, and offers the highest return of all the other types of buying gold

How does this SGB issue price compare with the previous series prices?

This chart shows the complete history:

Chart: Arthgyaan • Source: RBI • Get the data

More details are available here: Sovereign Gold Bond (SGB): complete issue price history in India.

What's next? You can join the Arthgyaan WhatsApp community

You can stay updated on our latest content and learn about our webinars. Our community is fully private so that no one, other than the admin, can see your name or number. Also, we will not spam you.

If you liked this article, please leave us a rating

The following button will take you to Trustpilot:

Discover an article from the archives

Worked out case studies for goal-based investing

Case study: how can this middle aged investor with two children plan for retirement and children's goals?

This article shows how a single-income middle aged couple with two small children reach their retirement and children’s goals.
Case study: can this double income single kid family reach FIRE at 50?

This article shows how a double-income couple with a 2-year old reach their FIRE dream at the age of 50.
Case study: how a family in their mid-30s with a newborn kid can FIRE and invest in real estate?

This article shows how a double-income couple with a newborn child can invest for their future goals of FIRE and real-estate investment.
Case study: how this double income recently married family can perform DIY goal-based investment planning

This article shows how a young just-married couple can invest for future goals using the Arthgyaan goal-based investing tool.
Case Study: How should couples in their 40s with a new baby plan their financial future?

Did you welcome a bundle of joy in your 40s? This article will discuss ways of planning the child’s (and your’s financial future)
Case study: how this double income single kid family can perform DIY goal-based investment planning

This article shows how a very typical salaried couple with one child can invest for future goals using the Arthgyaan goal-based investing tool.

Previous and next articles:

<p>Discover how expats can secure the right salary abroad to get a better than India lifestyle using the concept of purchasing parity.</p>

NRI

Calculating Minimum Salaries for Indian Expats Looking to Shift Abroad

Discover how expats can secure the right salary abroad to get a better than India lifestyle using the concept of purchasing parity.

Published: 10 September 2023

9 MIN READ

<p>Expert tips for maximizing your tax refund so that you can do the best thing to do for your portfolio in India.</p>

Tax

Maximizing Your Finances: Smart Moves for Your Tax Refund Windfall in India

Expert tips for maximizing your tax refund so that you can do the best thing to do for your portfolio in India.

Published: 13 September 2023

2 MIN READ

Latest articles:

<p>This article shows a handy ready reckoner for home loan EMI amounts for all tenures and interest rates along with the amount of principal and interest to be paid.</p>

House Purchase

How much EMI do I have to pay for my home loan?

This article shows a handy ready reckoner for home loan EMI amounts for all tenures and interest rates along with the amount of principal and interest to be paid.

Published: 29 September 2023

1 MIN READ

Retirement Reader Questions

How much money does this 39 year old investor need to invest per month to retire at 58?

A quick retirement calculation for a reader query who has a good amount of corpus already saved for retirement.

Published: 27 September 2023

7 MIN READ

Topics you will like:

Asset Allocation (20) Basics (8) Behaviour (10) Budgeting (11) Calculator (17) Case Study (6) Children (12) Choosing Investments (38) FAQ (6) FIRE (13) Gold (11) Health Insurance (4) House Purchase (17) Insurance (15) International Investing (10) Life Stages (2) Loans (9) Market Movements (13) Mutual Funds (29) NPS (6) NRI (13) News (9) Pension (8) Portfolio Construction (46) Portfolio Review (27) Reader Questions (6) Real Estate (6) Retirement (36) Review (12) Risk (6) Safe Withdrawal Rate (5) Set Goals (27) Step by step (14) Tax (37)

Next steps:

1. Email me with any questions.

2. Use our goal-based investing template to prepare a financial plan for yourself
OR
use this quick and fast online calculator to find out the SIP amount and asset allocation for your goals.

Don't forget to share this article on WhatsApp or Twitter or post this to Facebook.

Discuss this post with us via Facebook or get regular bite-sized updates on Twitter.