The most popular choice of every individual is investing in gold to diversify their portfolios and protect their wealth. A new investment avenue has emerged in recent years for all gold enthusiasts: Sovereign Gold Bonds (SGBs). These government-backed securities offer a unique opportunity to conveniently and securely own gold. The Sovereign Gold Bond Scheme was launched by Govt in November 2015, under Gold Monetization Scheme. Under the scheme, the issues are made open for subscription in tranches by RBI in consultation with GOI. RBI Notifies the terms and conditions of the scheme from time to time. SGBs are the perfect alternative to investment in physical gold.
With these bonds, one can enjoy capital appreciation and also earn interest every year. These bonds, issued by the Government of India, also eliminate several risks associated with physical gold.
How to Buy Sovereign Gold Bonds Online?
SGBs can be purchased anytime from the secondary market from the BSE or NSE. Online purchase of SGB bonds allows the entity to purchase them for a price of Rs.50 less than the nominal price. Scheduled commercial banks offer the primary issuance of SGBs.
To buy gold bonds online in India the steps are as follows:
Log in to your net banking account.
Choose the ‘eServices’ option and select ‘Sovereign Gold Bond’.
Read the terms and conditions, and select the option ‘Proceed’.
Fill out the registration form and click ‘Submit’.
Enter the subscription quantity in the purchase form alongside the nominee’s details.
After furnishing these details, select ‘Submit’.
Who is Eligible to Invest in a Sovereign Gold Bond Scheme?
The Reserve Bank of India allows the following entities to buy sovereign gold bonds:
Resident Individuals of India
A Hindu Undivided Family (HUF)
Individuals subscribing on a Minor’s behalf
Charitable Organisations, Trusts, and Universities
Joint Holders
The RBI does NOT allow the following entities to buy sovereign gold bonds:
NRIs, OCIs, PIOs
Private Limited Companies
Firms
LLPs
If you are planning to buy gold bonds online in India, you need to make a minimum investment of 1 gram.
The maximum limit for investing in a sovereign gold bond is as follows:
4 kilograms for individual investors and Hindu Undivided Families
20 kilograms for charitable organisations, trusts, and universities
The investment limit of 4 kilograms is applied only to the first holder in case of joint holding.
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