If you are also investing in gold, this news may come in handy and may also surprise you. In fact, investing in gold has always been considered beneficial. Those who invest in it always get profits in the long run. That is why the government also runs many types of schemes. The Sovereign Gold Bond Scheme is one of them. According to reports, the government may now stop this scheme or reduce its quotas. If this happens, there will be huge losses for those investors who have invested in them with the hope of getting good returns.
In the recently presented budget, the government announced a reduction in customs duty on gold. The reduction in customs duty is expected to reduce the demand for sovereign gold bonds. After the reduction in customs duty, SGB prices on NSE fell by 2-5 percent.
What is the sovereign gold bond?
The Sovereign Gold Bond scheme was started in 2015. The Sovereign Gold Bond is issued by the RBI on behalf of the government, so it is guaranteed by the government. This way, you get guaranteed returns on investment. In this case, an annual interest of 2.5 percent is available on the investment. This money is deposited in the bank accounts of the investors every 6 months. The first installment of SGB came on 30th November 2015. It matures in November 2023. The 2016-2017 series of the SGB scheme was launched in August 2016. This series will mature in August 2024.
Why can SGB be closed?
According to a Money Control news, the demand for sovereign gold bonds may decline due to reduction in customs duties. At the same time, the government feels that this scheme is costly for it. This is the reason why the government is planning to close or scale down this scheme. On the other hand, according to a senior government official, the government has reduced the target for issuance of sovereign gold bonds by 38% for this financial year. According to the official, the government is now planning to issue ‘paper gold’ worth Rs 18,500 crore in 2024-25. An estimate of Rs 29,638 crore was made in the interim budget.
Limit on buying sovereign gold bonds
Under the Sovereign Gold Bond Scheme, an individual can purchase a maximum of 4 kg of gold bonds in one financial year. The minimum investment required is 1 gram. At the same time, trusts or similar institutions can purchase bonds up to 20 kg. Please note that applications are issued in minimum quantities of 1 gram and its multiples.
How will investors suffer losses?
Investors who had invested in this scheme in series I 8 years ago may now suffer losses. In fact, the series of the year 2016-17 came on August 1, 2016. At that time its issue price was Rs 3,119 per gram. At that time, an annual interest of 2.75 percent was paid. The maturity of this series will occur next month, i.e. in August. Before the budget, the price of gold was around Rs 74,000 per 10 grams. If the government had not reduced the customs duty on gold, the price of gold could have increased further. But due to this, the price of gold has gone down. Due to the lack of reduction in customs duty, suppose the price of gold in August would have been Rs 75,000 per 10 grams and now it will be around Rs 70,000, then in such a situation, the investor suffered a loss of Rs 5,000 per 10 grams. 10 grams.
