New Delhi, Feb 23 (IANS): The government on Thursday said it had decided to issue the fourth series of Sovereign Gold Bonds 2016-17 and the applications will be accepted from February 27 till March 3.

"The government, in consultation with the Reserve Bank of India, has decided to issue the Sovereign Gold Bonds 2016-17-Series IV. The bonds will be sold through banks, Stock Holding Corporation of India Limited, designated post offices and recognised stock exchanges, viz. National Stock Exchange of India Limited and Bombay Stock Exchange," a Finance Ministry statement said here.

The bonds will be issued on March 17.

Payments for the bonds is by cash (up to maximum of Rs 20,000) or demand draft or cheque or electronic banking. 

The bonds' tenure will be eight years with an exit option from the fifth year to be exercised on the interest payment dates. 

Minimum permissible investment will be in one gm gold. 

"The maximum amount subscribed by an entity will not be more than 500 gm per person per fiscal (April-March). A self-declaration to this effect will be obtained. In case of joint holding, the investment limit of 500 grams will be applied to the first applicant only," the statement said.

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

Bond price will be fixed in rupees on the basis of simple average of closing price of gold of 999 purity published by the India Bullion and Jewellers Association for the week (Monday to Friday) preceding the subscription period.