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Sovereign Gold Bond scheme opens for subscription today: 10 points

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bikidas2060

1) The subscription period for 2021-22 Series-VII will be of 5 days starting today.

2) The issue price has been fixed at ₹4,765 per gram of gold.

3) The issue price of the gold bonds will be ₹50 per gram less for those who subscribe online and pay through digital mode.

4) The bonds will be sold through banks (except small finance banks and payment banks), Stock Holding Corporation of India Limited (SHCIL), Clearing Corporation of India Limited (CCIL), designated post offices, and recognised stock exchanges (National Stock Exchange of India and Bombay Stock Exchange).

5) The tenure of the bond will be for a period of eight years with an exit option after the fifth year to be exercised on the next interest payment dates.

6) These bonds are traded in the secondary markets.

7) The investors will be compensated at a fixed rate of 2.50 per cent per annum payable semi-annually on the nominal value

8) The minimum permissible investment will be 1 gram of gold.

9) The maximum limit of subscription shall be 4 kg for individuals, 4 Kg for HUF and 20 kg for trusts and similar entities per fiscal (April-March).

10) SGBs held till maturity attract no capital gains tax. In case the SGBs are sold before the maturity date on the exchanges, the capital gains will be levied at the applicable rates. Interest earned from SGBs is taxable as per the investor’s tax slab.

Title and body of the article has been copied from https://www.livemint.com/market/commodities/sov...

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This video Was possible because of you guys – THANKS for the information shared in discussion!!!

cc- @bikidas2060 @andromeda @kukdookoo and others!

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Deal Cadet Deal Cadet
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@bikidas2060 can you please share any knowledge link/insights of Sovereign Gold Bond scheme .
We have 2 FDs scheduled for renewal today, shall i consider bond over FD? I am getting 6.5% and expected lock-in period in 12-18 months.

Edit – Visited some sites. tenure is 8 years with exit at 5th year. hard pass as of now.

Deal Cadet Deal Cadet
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TempAcc wrote:

@bikidas2060 can you please share any knowledge link/insights of Sovereign Gold Bond scheme .
We have 2 FDs scheduled for renewal today, shall i consider bond over FD? I am getting 6.5% and expected lock-in period in 12-18 months.

Edit – Visited some sites. tenure is 8 years with exit at 5th year. hard pass as of now.

You can also sale in the exchange market like any other shares, so is effectively liquid

Deal Cadet Deal Cadet
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Expected returns pa with sgb?

Deal Cadet Deal Cadet
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Dealbraker wrote:

You can also sale in the exchange market like any other shares, so is effectively liquid

Thanks, on that trail came to know that i can purchase bonds anytime via secondary market. Will wait to cooldown the market .

Hunk Hunk
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TempAcc wrote:

@bikidas2060 can you please share any knowledge link/insights of Sovereign Gold Bond scheme .
We have 2 FDs scheduled for renewal today, shall i consider bond over FD? I am getting 6.5% and expected lock-in period in 12-18 months.

Edit – Visited some sites. tenure is 8 years with exit at 5th year. hard pass as of now.

@Awake @BubbleBoyChickenLittle @Wontdisplaymyname @suplex_city @Sudarshan61 @panchabhut @andromeda
@guest_999
I have tagged the experts, bhai. 🙂🙂🙂

Deal Cadet Deal Cadet
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ddstar wrote:

Expected returns pa with sgb?

It depends on return on gold plus 2.5% interest

If u hold till maturity, then no capital gains tax

Deal Cadet Deal Cadet
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ddstar wrote:

Expected returns pa with sgb?

You may get average returns of 6-7% per annum if you hold till maturity.

Deal Subedar Deal Subedar
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ddstar wrote:

Expected returns pa with sgb?

only 2.5% interest is confirm.
rest depends on Gold movement (which cant be predicted)

Deal Subedar Deal Subedar
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TempAcc wrote:

@bikidas2060 can you please share any knowledge link/insights of Sovereign Gold Bond scheme .
We have 2 FDs scheduled for renewal today, shall i consider bond over FD? I am getting 6.5% and expected lock-in period in 12-18 months.

Edit – Visited some sites. tenure is 8 years with exit at 5th year. hard pass as of now.

FD is not comparable to SGB.

SGB is alternative to physical gold investment.

Deal Subedar Deal Subedar
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ddstar wrote:

Expected returns pa with sgb?

Market linked to gold price. It’s negative 20% in the past 1-1.5 years and Positive 40% in the past 2.5 years.

Analyst Analyst
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Dealbraker wrote:

You can also sale in the exchange market like any other shares, so is effectively liquid

How is the value in secondary market when compared with the official issuer?

Analyst Analyst
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bikidas2060 wrote:

@Awake @BubbleBoyChickenLittle @Wontdisplaymyname @suplex_city @Sudarshan61 @panchabhut @andromeda
@guest_999
I have tagged the experts, bhai. 🙂🙂🙂

I’m no expert in this. My thoughts are divided across both, but actions only in buying physical at the moment.

My FIL keeps trading with SGBs, and recently he started purchasing gold coins. Thanks to his son-in-law (me sunglasses ), and yet I’m still debating with myself over entering into SGBs.

@TempAcc consider all the in-s and out-s involved in trading SGBs when required (say 1.5-2 years down the line), and weigh it against what you are expecting with FDs.

in-s include all the rebates, interest, appreciation (?) you get over time, out-s include the taxes you pay on gains, depreciation (?), and rate-cut if any when trading in secondary market.

Since your horizon is less than 2 years, and any invester with shorter horizon expects investment to be safe. With that, I feel FDs are safest bet, you get guaranteed returns. And if possible put these FDs on not-earning (not even an iota of disrespect meant) folks at home, you can save on taxes at the time of redemption.

@kukdookoo

Deal Cadet Deal Cadet
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andromeda wrote:

How is the value in secondary market when compared with the official issuer?

they always trade at 100-200/gm discount as compared to physical market

generally the issue price is also bit at discount (50/gm is by default for all online application).

Deal Subedar Deal Subedar
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bikidas2060 wrote:

Aapka khayal Prakash nai kiye 22g!!!

physical over any digital(even if it comes under the control of rbi)/sgb etc.

Analyst Analyst
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Dealbraker wrote:

they always trade at 100-200/gm discount as compared to physical market

generally the issue price is also bit at discount (50/gm is by default for all online application).

So if I get it correctly, we buy from source at 50/- discount and if we wish to trade in seconday market, we give at 100-200/gm discount, meaning at a loss of 50-150/gm, right?

Deal Subedar Deal Subedar
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andromeda wrote:

So if I get it correctly, we buy from source at 50/- discount and if we wish to trade in seconday market, we give at 100-200/gm discount, meaning at a loss of 50-150/gm, right?

+ @Dealbraker
haath jod ke maafi ki aap dono ke beech bol rha hoon. according to me

benefits of sgb
government backed
interest 2.5%
no storage tension
no purity tension
price is okayish

cons of sgb
government backed
interest is taxable
long maturity period
capital gains taxes or the amount is added in income. Forgot, please check about it
u don’t always get desired price in secondary market

benefits of physical
good purchase price (still higher than spot because of shitty import taxes) than sgb

cons
purity tension (if bought from a good brand) tension x infinity (if bought from a jeweller even with a bill)
storage
capital gains taxes
at the time of sales there will be a deduction of around 11-16% (your discount at the time of purchase will be wiped off) so consider this for a looooooong time

but still if i have money will go for physical. why? because the other one is government backed.

Analyst Analyst
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kukdookoo wrote:

+ @Dealbraker
haath jod ke maafi ki aap dono ke beech bol rha hoon. according to me

Why?

This is an open discussion, you are free to give your opinion.

at the time of sales there will be a deduction of around 11-16% (your discount at the time of purchase will be wiped off) so consider this for a looooooong time

What is this 11-16%? I never encountered with any reputed jewellers. They weight the item, do a quality check, melt it, do another quality/weight check, and adjust the value in the bill. The way I see the con here is, only some amount of time is spent/wasted during this redemption

Deal Subedar Deal Subedar
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andromeda wrote:

Why?

This is an open discussion, you are free to give your opinion.

at the time of sales there will be a deduction of around 11-16% (your discount at the time of purchase will be wiped off) so consider this for a looooooong time

What is this 11-16%? I never encountered with any reputed jewellers. They weight the item, do a quality check, melt it, do another quality/weight check, and adjust the value in the bill. The way I see the con here is, only some amount of time is spent/wasted during this redemption

seniors ke beech bolo to kuch log objection karte ha

What is this 11-16%? I never encountered with any reputed jewellers. They weight the item, do a quality check, melt it, do another quality/weight check, and adjust the value in the bill. The way I see the con here is, only some amount of time is spent/wasted during this redemption

for example say market purchase price 5000. you paid example 4800 for it including gst
at the time of sales melting/inspection etc. charges are there 400-800

now out of 5000 one will loose 3% gst + these charges. if you ask for a bill then jeweller will again charge 3% gst which we will have to pay. ofcourse in exchange for jewellery this difference will be less, but their making charges are high and no guarantee for purity.

Beacon Beacon
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kukdookoo wrote:

seniors ke beech bolo to kuch log objection karte ha

What is this 11-16%? I never encountered with any reputed jewellers. They weight the item, do a quality check, melt it, do another quality/weight check, and adjust the value in the bill. The way I see the con here is, only some amount of time is spent/wasted during this redemption

for example say market purchase price 5000. you paid example 4800 for it including gst
at the time of sales melting/inspection etc. charges are there 400-800

now out of 5000 one will loose 3% gst + these charges. if you ask for a bill then jeweller will again charge 3% gst which we will have to pay. ofcourse in exchange for jewellery this difference will be less, but their making charges are high and no guarantee for purity.

https://www.business-standard.com/article/econo...

Have a look at this

Analyst Analyst
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kukdookoo wrote:

seniors ke beech bolo to kuch log objection karte ha

What is this 11-16%? I never encountered with any reputed jewellers. They weight the item, do a quality check, melt it, do another quality/weight check, and adjust the value in the bill. The way I see the con here is, only some amount of time is spent/wasted during this redemption

for example say market purchase price 5000. you paid example 4800 for it including gst
at the time of sales melting/inspection etc. charges are there 400-800

now out of 5000 one will loose 3% gst + these charges. if you ask for a bill then jeweller will again charge 3% gst which we will have to pay. ofcourse in exchange for jewellery this difference will be less, but their making charges are high and no guarantee for purity.

Looks like the local jewellers you went are taking you for a ride.

I have exchanged old jewellery, coins for new items with reputed jewellers. There are absolutely no charges for melting/ inspection whatever. They give the complete value for the quality/quantity you give.

With Bhima Jewellers I observed they give 70/- per gram lesser when you exchange. So I avoid this maker for exchanges.

On the making charges, they are the same whether one pays for it with cash or equivalent gold. And the quality is guaranteed anyway with the bill and hallmarks in place

And I purchase jewels with proper invoicing. Any lapse in the invoice, I take up with them then and there. I’m ok to pay taxes than end up part of a shady work.

Finally the gold coins/pendats available on e-commerence, the effective price we pay are lesser than the gst excluded market price, so I don’t see any loss here, rather small profits.

Another experience, I bought a chain(916) from Bhima, and after 2 years exchanged for another one in Tanishq. I got the value for 93.2% instead of 91.6% because their machine reported 93.2% after all melting etc, no loss in weight though. By the way, the chain has 916 hallmark on it.

Hunk Hunk
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kukdookoo wrote:

seniors ke beech bolo to kuch log objection karte hai

In the end saab users hain platform ke. Senior junior kuch hota nai hai yahan.

Deal Subedar Deal Subedar
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andromeda wrote:

Looks like the local jewellers you went are taking you for a ride.

I have exchanged old jewellery, coins for new items with reputed jewellers. There are absolutely no charges for melting/ inspection whatever. They give the complete value for the quality/quantity you give.

With Bhima Jewellers I observed they give 70/- per gram lesser when you exchange. So I avoid this maker for exchanges.

On the making charges, they are the same whether one pays for it with cash or equivalent gold. And the quality is guaranteed anyway with the bill and hallmarks in place

And I purchase jewels with proper invoicing. Any lapse in the invoice, I take up with them then and there. I’m ok to pay taxes than end up part of a shady work.

Finally the gold coins/pendats available on e-commerence, the effective price we pay are lesser than the gst excluded market price, so I don’t see any loss here, rather small profits.

Another experience, I bought a chain(916) from Bhima, and after 2 years exchanged for another one in Tanishq. I got the value for 93.2% instead of 91.6% because their machine reported 93.2% after all melting etc, no loss in weight though. By the way, the chain has 916 hallmark on it.

in north the charges are there because of associations of these jewellers. in south the price of gold is anyways cheaper.

have you exchanged your coin for cash rather than exchanging it for jewellery? try it once they will follow the same. If are going to a certain jeweller since a long time then they might not do it. But if you go to a new one then they will show their real face.

brands like bhima, malabar etc. are pure luck. i have read reviews and have seen people getting negative weight tolerance. but once i read a review and that a guy got positive weight tolerance. unexpected from these brands? yes.

Finally the gold coins/pendats available on e-commerence, the effective price we pay are lesser than the gst excluded market price, so I don’t see any loss here, rather small profits.
you are right about this but compare it to spot prices, the custom duty charges cannot be set off until and unless there is a good discount.

Critic Critic
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Alright to keep around 20% of your portfolio in these sovereign bonds & for at least 5 years.

Analyst Analyst
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kukdookoo wrote:

in north the charges are there because of associations of these jewellers. in south the price of gold is anyways cheaper.

have you exchanged your coin for cash rather than exchanging it for jewellery? try it once they will follow the same. If are going to a certain jeweller since a long time then they might not do it. But if you go to a new one then they will show their real face.

brands like bhima, malabar etc. are pure luck. i have read reviews and have seen people getting negative weight tolerance. but once i read a review and that a guy got positive weight tolerance. unexpected from these brands? yes.

Finally the gold coins/pendats available on e-commerence, the effective price we pay are lesser than the gst excluded market price, so I don’t see any loss here, rather small profits.
you are right about this but compare it to spot prices, the custom duty charges cannot be set off until and unless there is a good discount.

I dont intend to exchange for cash, atleast not at the moment. It is mostly for consumption in my case or investment.

And many reputed jewellers dont give cash for coin, atleast this is what I’m told when asked during an exchange.They may do it if the coin is of same brand name. Local jewellers/ goldsmiths are anyway expected to take huge cut, no suprises there

I did exchange a coin recently with a local known jeweller. I got the value of gold as on date, there is a difference of 100-200 overall, I didn’t bother as I’m already making 1000/- gains on a 5gm coin. So considered that 100-200 as profit sharing and made peace. This exchange is purely for the sake of experience.

I’m not sure what/where are those reviews, but minimal tolerances are expected, but not close to a gram.

Deal Subedar Deal Subedar
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andromeda wrote:

I dont intend to exchange for cash, atleast not at the moment. It is mostly for consumption in my case or investment.

And many reputed jewellers dont give cash for coin, atleast this is what I’m told when asked during an exchange.They may do it if the coin is of same brand name. Local jewellers/ goldsmiths are anyway expected to take huge cut, no suprises there

I did exchange a coin recently with a local known jeweller. I got the value of gold as on date, there is a difference of 100-200 overall, I didn’t bother as I’m already making 1000/- gains on a 5gm coin. So considered that 100-200 as profit sharing and made peace. This exchange is purely for the sake of experience.

I’m not sure what/where are those reviews, but minimal tolerances are expected, but not close to a gram.

And many reputed jewellers dont give cash for coin, atleast this is what I’m told when asked during an exchange
they say that so that they can give you their jewellery. which will mean more profits for them. anyways this is a very tough line for the retail investors. we are anyways getting above spot price so we have to make peace with this.

Missing