Sovereign Gold Bond-Best Gold Investment in India

Investors are going to get 2.50% per annum (Fixed rate) interest on the initial investment. Interest will credited semi-annually to the bank account of the investor. The last interest will be payable on maturity along with the principal. In such case if you are planning to buy physical gold for investment, this bond is giving same advantage + extra interest of 2.50% PA. As well as you can use this bound for collateral for loans.

• No hassle to hold physical gold.
• Risks and costs of storage are eliminated.
• Assurance of market rate of maturity.
• Periodical interest of 2.50% PA.
• Minimum investment: 1 gram. Maximum investment: 4KG grams for individual, 4 Kg for HUF and 20 Kg for trusts and similar entities per fiscal year.
• Saving on making charges in case of Jewellery.
• Purity guarantees.
• The Bond is by RBI, held on the books of the RBI or in demat form, eliminating risk of loss of scrip etc.
• The Bond is available in demat and paper form.
• Can be bought from BSE, NSE, Post office or bank.
• The tenor of the bond is for a minimum of 8 years with the option to exit in 5th, 6th and 7th years.
• The bonds will carry a sovereign guarantee both on the capital invested and the interest.
• No STT (Securities Transaction Tax).
• Capital Gains Tax (as per Government of India guidelines).
• RBI will announce the price before the issue date which will be fixed at the previous week's simple average of the closing price of gold of 999 purity (24 carat) published by IBJA.
• Traded on Exchange, older version of bonds is available in exchange for trade.

Investors can buy/apply for the bond through SEBI authorized trading members and financial advisors of NSE, BSE. The RBI also appointed scheduled commercial banks and designated post offices. NBFCs, National Saving Certificate (NSC) agents and others can act as agents. They would authorized to collect the application form and submit in banks and post offices. Application forms will be provided by trading members, authorized agents and can also be downloaded from RBI's website.

The Bonds are issued by the Reserve Bank of India on behalf of the Government of India. The bonds are distributed through banks and designated post offices, NSE and BSE. This should make subscribing to the bonds an easy affair. During redemption, "the price of gold may be taken from the reference rate, as decided, and the Rupee equivalent amount may be converted at the RBI Reference rate on issue and redemption".

Yes, there may be a risk of capital loss if the market price of gold declines. However, the investor does not lose in terms of the units of gold that he has paid for. Investor are going to get 2.50% interest PA on investment, which is apart from gold price movement.

Persons resident in India as defined under the Foreign Exchange Management Act, 1999 are eligible to invest in SGB. Eligible investors include individuals, HUFs, trusts, universities, charitable institutions, etc.

Yes. Bond can be bought on the name of the minor, the application on behalf of the minor has to be made by his / her guardian.

Minimum 1 gram and maximum 4KG per person per fiscal year (April - March). From Oct 2017, you can subscribe 4 KG for individual, 4 Kg for HUF per fiscal year. This 4 KG includes both initial issuance of Government and those purchased from the Secondary Market.

Yes, If the customer meets the eligibility criteria, produces a valid identification document and remits the application money on time, he/she will receive the allotment.

Yes, A customer can apply online through the website of the listed scheduled commercial banks, NSE, BSE or SEBI registered brokers.

The investor will advise one month before maturity on the ensuing maturity of the bond. On the date of maturity, the maturity proceeds will credit to the bank account as per the details on record. In case there are changes in any details, such as, account number, email ids, then the investor must intimate the bank/PO promptly.

Yes, these securities are eligible to use as collateral for loans from banks, financial Institutions and Non-Banking Financial Companies (NBFC). The Loan to value ratio will be the same as applicable to ordinary gold loan mandated by the RBI from time to time.

Payment can made through cash/cheques/demand draft/electronic fund transfer.

Yes, the bonds can hold in the demat account.

The bonds are tradable on stock exchanges from the date to be notified by RBI. The bonds can also be sold and transferred as per provisions of the Government Securities Act.

Yes, partial holdings can be redeemed in multiples of one gram.

Yes, buying sovereign gold bonds online is the best and easy option. As per RBI guidelines, banks/SHCIL offices/designated Post Offices/agents are the issuing agencies for sovereign gold bonds.

1. Via Bank/Post Office

   Most of the banks allow you to buy/invest in sovereign gold bonds online with their net banking platform. However, the banks who are providing 3-in-1 accounts (savings account, Trading account, and Demat account) offer direct links to buy SGB from their trading application.

   As you have a Demat account linked with your 3 in 1 account, you will get the Demat holding of your SGB once issued.

   In case you don’t have a 3-in-1 account with a bank, you can still purchase/invest in sovereign gold bonds by submitting your application online via net banking. If you don’t have net banking access, you can visit a nearby bank or post office and fill the application offline.

   When you submit an application offline, you will not get an online discount ofRs 50 per gram.

   For an offline application, you can apply up to Rs 20,000 by cash. For above Rs 20,000, you need to transact via cheques/demand draft/electronic fund transfer.

2. Via Stock Broker

   If you have a trading and Demat account with any broker then you can buy/invest in sovereign gold bonds online. You will get Rs 50 per gram discount as you are buying SGB online as well as you will get an issued bond in your demat account.  In case you want to liquidate your holding any time, you can sell the same in the stock market.

Yes, Zerodha allows you to invest in Sovereign Gold Bonds online. Zerodha has created a special page for the same. Link will be active only when there are active Sovereign Gold Bonds Schemas. Orders are accepted till 3:30 PM on the last subscription date.

Sovereign Gold Bonds are listed on the exchange 10-15 days after the issue date and can be traded on Zerodha Kite. For now, SGBs are traded via CNC orders only.

You can buy SGB (Sovereign Gold Bond) from banks and other financial intermediaries or directly from the broker.

When you buy SGB from any financial institute then it is always preferable to mention your Demat account information, so that, you hold SGB in your Demat account and can be traded on NSE like stocks. In that case, you don’t have any locking period. However, if you have not provided Demat information to the concerned bank then you hold a physical certificate for your SGB holdings.

To sell SGB (before maturity), SGB must be converted into dematerialized form. So if you want to sell SGB before maturity but have not yet converted bonds into Demat form then firstly, you have to provide your Demat account details to the concerned bank, so that, the bank will upload the details on the e-Kuber portal of RBI to process dematerialization request.

To provide your Demat details, you must get CMR (Client Master Report) from the respective broker. The CMR contains your Demat account details including name, DOB, nominee, bank account, etc.

Once the concerned bank has mapped your Demat details and SGB is successfully credited to your Demat account. Then you can easily sell it on the NSE by placing a regular sell order just like stocks.