New Delhi: The government introduced the Sovereign Gold Bond Scheme in November 2015 as part of the Gold Monetisation Scheme. This scheme allows people to invest in gold bonds issued by the Reserve Bank of India (RBI) in consultation with the Government of India. SGBs are government securities denominated in grams of gold.
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They are substitutes for holding physical gold. Investors have to pay the issue price in cash and the bonds will be redeemed in cash on maturity. The Bond is issued by the Reserve Bank on behalf of Government of India. The Bonds bear interest at the rate of 2.50 per cent (fixed rate) per annum on the amount of initial investment. Interest will be credited semi-annually to the bank account of the investor and the last interest will be payable on maturity along with the principal.
When you invest in these bonds, you receive a Certificate of Holding on the issuance date. You can get this certificate from the issuing banks or the RBI via email if you provide your email address in the application form. Some banks, like the State Bank of India (SBI), offer the option to buy these bonds online.
You can invest in these bonds with a minimum of one gram of gold, and there’s a maximum limit for different types of investors:
1. Individuals can subscribe for up to 4 kg
2. Hindu Undivided Families (HUFs) can also subscribe for up to 4 kg
3. Trusts and similar entities identified by the government can subscribe for up to 20 kg per fiscal year (April to March).
Steps To Buy Sovereign Gold Bonds Online From SBI:
Step 1: Log in to your SBI net banking account.
Step 2: Go to ‘eServices’ and select ‘Sovereign Gold Bond’.
Step 3: Accept the terms and conditions.
Step 4: Fill out the registration form carefully and submit it.
Step 5: In the subscription form, specify the quantity you want to subscribe for and the nominee’s name.
Step 6: Finally, submit the form.
Who Can Invest In Sovereign Gold Bonds:
These bonds are available for sale to resident Indian entities, including individuals (either individually, on behalf of a minor child, or jointly with another individual), under the Foreign Exchange Management Act, of 1999.
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Eligible investors include individuals, HUFs, trusts, universities, and charitable institutions. If you’re an individual investor and your residential status changes from resident to non-resident, you can continue to hold these bonds until redemption or maturity.
