Sovereign Gold Bond (SGB) 2023-24 (Series III) priced at 6199: Who Should Invest?
Sovereign Gold Bond (SGB) 2023-24 (Series III): know all the details about it to decide if you should invest.
Sovereign Gold Bond (SGB) 2023-24 (Series III) priced at 6199: Who Should Invest?
Posted on 16 Dec 2023
Author: Sayan Sircar
Tags: 
Gold
9 mins read
Gold
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Sovereign Gold Bond (SGB) 2023-24 (Series III): know all the details about it to decide if you should invest.
📚 Topics covered:
- What is a Sovereign Gold Bond?
- What is Sovereign Gold Bond (SGB) 2023-24 (Series III)?
- What is the price per gram of Sovereign Gold Bond (SGB) 2023-24 (Series III)?
- How to purchase Sovereign Gold Bond (SGB) 2023-24 (Series III)?
- Does SGB give good return?
- Who should purchase SGB?
- How does this SGB issue price compare with the previous series prices?
This article is a part of our detailed article series on the new issues of Sovereign Gold Bond (SGB) as well as maturity of existing SGBs. Ensure you have read the other parts here:
-
SGB issued in Nov 2016 has given 159% return in 8 years. How does that compare with FDs and equity mutual funds?
The Nov 2016 SGB showcased a fantastic return on maturity compared to other investment avenues like fixed deposits and some equity mutual funds.
-
SGB issued in Sep 2016 has given 139% return in 8 years. How does that compare with FDs and equity mutual funds?
The Sep 2016 SGB showcased a fantastic return on maturity compared to other investment avenues like fixed deposits and some equity mutual funds.
-
SGB issued in Aug 2016 has given 122% return in 8 years. How does that compare with FDs and equity mutual funds?
The Aug 2016 SGB showcased a fantastic return on maturity compared to other investment avenues like fixed deposits and some equity mutual funds.
-
SGB issued in Mar 2016 has given 126% return in 8 years. How does that compare with FDs and equity mutual funds?
The Mar 2016 SGB showcased a fantastic return on maturity compared to other investment avenues like fixed deposits and some equity mutual funds.
-
SGB issued in Feb 2016 has given 141% return in 8 years. How does that compare with FDs and equity mutual funds?
The Feb 2016 SGB showcased a fantastic return on maturity compared to other investment avenues like fixed deposits and some equity mutual funds.
-
Sovereign Gold Bond (SGB) 2023-24 (Series IV) is priced at 6263: Who Should Invest?
Sovereign Gold Bond (SGB) 2023-24 (Series IV): know all the details about it to decide if you should invest.
-
The first SGB issued in Nov 2015 has given 128% return in 8 years. Is that good or bad?
The 2015 Series I SGB showcased a notable return on maturity compared to other investment avenues like fixed deposits and certain equity mutual funds.
-
Sovereign Gold Bond (SGB) 2023-24 (Series II) priced at 5923: Who Should Invest?
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 I) priced at 5926: Who Should Invest?
Sovereign Gold Bond (SGB) 2023-24 (Series I): know all the details about it to decide if you should invest.
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.
What is Sovereign Gold Bond (SGB) 2023-24 (Series III)?
SGB is issued by the RBI periodically. This particular series or tranche is called Sovereign Gold Bond (SGB) 2023-24 (Series III). These are the details of this particular series
- Subscription period: December 18 – December 22, 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: ₹6199 per gram
- Retail discount: ₹50 per unit of SGB for online application and digital payments
- Price per unit for online subscription: ₹6149
- 2.5% annual interest (paid at the rate of 1.25% on ₹6199 every 6 months) will be received per unit. This interest is taxable
- The bond matures on Dec-2031. The maturity proceeds will be tax-free
- SGB can be purchased only by resident Indians but not by NRIs
What is the price per gram of Sovereign Gold Bond (SGB) 2023-24 (Series III)?
1 unit of Sovereign Gold Bond (SGB) 2023-24 (Series III) is priced at ₹6199. Price for online subscription with digital payment is ₹6149 per unit.
The complete press-release is available here.
How to purchase Sovereign Gold Bond (SGB) 2023-24 (Series III)?
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?.
NRIs cannot invest in SGB.
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 ₹6199 in this tranche today, you will get the 6-monthly interest but the money you will get will on maturity depend again on the IBJA gold rates at that time.
Related:
Budget 2024: Should you still invest in SGB after Gold import duty cut?
Historically, gold has returned over 9% a year in India since the 1950s. This means that the price of gold has essentially doubled every 8 years as per the Rule of 72. Since we import most of our gold, the domestic price of gold has fluctuated a lot due to Rupee depreciation against the US Dollar over the decades. Over the years, the average 8-year gold price return has been around 10%. SGB gives a slight interest and is therefore the only option to invest in Gold with the highest possible return.
Here is a complete history of gold price in India: A complete history of gold prices in India since the 1950s.
To understand better about whether SGB is right for you:
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?
The complete SGB price history in India is here:
The complete details of all SGB issued so far are available here: Sovereign Gold Bond (SGB): complete issue price history in India.
Related Articles
- Sovereign Gold Bond (SGB) 2023-24 (Series I) priced at 5926: Who Should Invest?
- Sovereign Gold Bond (SGB) 2023-24 (Series II) priced at 5923: Who Should Invest?
- Sovereign Gold Bond (SGB) 2023-24 (Series IV) is priced at 6263: Who Should Invest?
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This post titled Sovereign Gold Bond (SGB) 2023-24 (Series III) priced at 6199: Who Should Invest? first appeared on 16 Dec 2023 at https://arthgyaan.com
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