New Delhi, Oct 22 (IANS): The government on Saturday said it has fixed Rs 2,971 per gram as issue price for the next offering of its Sovereign Gold Bond (SGB) scheme, an official said.

The issue price has been fixed at Rs 2,971 per gram for subscription during October 23-25, with settlement on October 30, said a statement from the Ministry of Finance.

"The Government of India, in consultation with the Reserve Bank of India, has decided to allow discount of Rs 50 per gram from the issue price to those investors who apply online and the payment is made through digital mode," it said.

The SGB 2017-18 - Series-III is open for public subscription from October 9 to December 27, 2017. Bonds under the scheme earn an interest of 2.50 per cent per annum, payable every six months on initial investment.

The bonds with a tenure of eight years and an exit option from the fifth year are sold through banks, post offices, Stock Holding Corporation of India (SHCIL) and recognised stock exchanges -- National Stock Exchange (NSE) and Bombay Stock Exchange (BSE).

SGBs are denominated in multiples of gram of gold with a minimum unit of one gram and can also be held in demat form for ease of trading.

The scheme was launched in November 2015 as an alternative to purchasing physical gold and mobilise the idle gold held by households and institutions into productive use in the long run.