Salient Features:

• They are issued by the RBI
• The bonds are denominated in a multiple of grams of gold with a basic unit of 1 gram.
• The bonds are sold through notified banks and post offices.
• Minimum Investment - 2 units i.e. 2 grams.
• Maximum Permissible Investment - 500 grams per person per fiscal year.
• Tenure - 8 years with exit option from 5th year.
• Interest - 2.75% p.a. payable semi-anually on initial value of investment.
• Taxation - Interest income is taxable and Capital Gains on sale will be taxed.
• Collateral - The bonds can be used as collateral to loans
• The bonds will be tradable on exchanges.
• Issue and Redemption Price - Simple average of Gold's closing price during the previous week