Sovereign Gold Bonds 2021-22: Subscription For 5th Tranche Ends Soon, Should You Buy?

Sovereign Gold Bond 2021-22: The fifth tranche of the government-run sovereign gold bond scheme will close for subscription today - August 13, 2021. An issue price of ₹ 4,790 per unit, equivalent to the value of one gram of gold, is applicable for the fifth installment of the gold bond scheme 2021-22, according to the Reserve Bank of India (RBI). The date of issuance for the tranche is set as August 17, 2021. The fifth tranche window opened for investors on August 9 and ends today, remaining open for a period of five days, as per the schedule set for the gold bond scheme 2021-22.

The state-run gold bond scheme - on behalf of the RBI, has become a popular means to invest the yellow metal in a non-physical form, especially amid the COVID-19 pandemic. Gold bonds are considered to be safer for investment and are linked to the market price of the precious metal. (Also Read: What Are Sovereign Gold Bonds? Here's All You Need To Know )

After the current series, the gold bond scheme will be available for subscription for one more time. Resident individuals, universities, Hindu Undivided Families (HUFs), trusts, and charitable institutions can invest in the gold bond scheme. The interest-paying gold bonds can also be used as collateral for loans.

Sovereign Gold Bonds 2021-22 Series V: August 9-August 13: Here's All You Need To Know

Should You Buy?

“The price for the fifth tranche of SGB is fixed at Rs 4790/gm. Investment in non-physical gold, via digital or paper gold, is highly recommended as it provides high liquidity, no storage cost, and is easier to sell vs physical gold. Investment in SGBs comes with an interest coupon payable semi-annually. Investment in SGB is a superior alternative to physical gold. The investments in non-physical gold will help the government to keep a check on the currency and larger fiscal deficit.

The rising US dollar and Treasury yields on the back of a sooner than expected policy tightening by the Fed have largely led to softening of gold prices. Gold prices domestically and internationally have traded in a narrow range in the past few months.

The latest variant of the virus, the pace of vaccination, unlocking, and signs of policy tightening by the Fed will guide gold prices going forward,' said Mr. Nish Bhatt, Founder and CEO, Millwood Kane International - an investment consulting firm. 

Discount For Online Subscribers

A discount of ₹ 50 per unit is applicable for all those subscribers who are investing in the gold bond scheme online, according to the RBI. For the online subscribers - who make the payment through any o the digital modes - the issue price is set at ₹ 4,740 per gram of gold in the fifth tranche of sovereign gold bonds 2021-22 scheme.

How To Invest In Sovereign Gold Bonds

One can invest in gold bonds through the nationalised or private banks (excluding the small finance and payments banks), the stock exchanges - Bombay Stock Exchange and National Stock Exchange, Stock Holding Corporation, or at the designated post offices.

The process for purchasing gold bonds is similar to that of the gold exchange-traded funds (ETFs) through a stock exchange. Once the whole transaction is complete, the bonds are transferred to the buyer's account in a demat form, according to the RBI.