Andhra Bank announced the opening of the Sovereign Gold Bond scheme 2016-17 series-III, notified by the Government of India, for public subscription from Monday to November 2, at all its 2,853 branches across the country.
The bonds would be restricted for sale to resident Indian entities, including individuals, Hindu undivided families, trusts, universities, and charitable institutions who can apply for gold bonds (minimum of one gram and maximum of 500 grams).
The tenor of the bond is eight years with provision of premature cancellation after 5 years.
The Reserve Bank of India (RBI) notified a rate of interest of 2.50 per cent per annum on the initial investment based on the nominal value.
The nominal price of gold is arrived based on simple average of closing price gold as published by the IBJA in the preceding week to the issue.
The issue price is fixed Rs. 50 less than the nominal price.
The issue price of the Sovereign Gold Bond for this tranche has been fixed at Rs. 2,957 per gram.
Gold Bond Scheme enables people to invest in yellow metal without physically buying gold, and receive money equivalent to the market value of gold as determined by the RBI at the time of redemption. Besides, interest would be paid on the invested amount semi-annually.
The scheme provides adequate protection against the price fluctuation in gold during the period of investment.
Zonal manager V. Venkateswar Rao urged the people to avail the benefits of the scheme and approach any Andhra Bank branch for subscription of bonds.
Customers having internet banking facility can apply online for SGB bonds, he said.
