We Indians love gold. The demand for gold soars during the festival and weeding season. Gold in India is not just used as jewellery, many people invest in physical gold. There are better ways to invest in gold. Sovereign gold bond is one of the best ways to take exposure in gold. You can buy sovereign gold bond online through your savings account’s net banking platform or mobile banking without a demat account.
Gold is considered as a safe haven asset. The gold price increases during uncertain times such as slowing global economic growth rate, trade wars, and political unrest. In the current scenario, COVID-19 pandemic has slowed the economic growth and equity assets have taken a hit. As a result, the demand for gold has increased.
In this article, we will know all about sovereign gold bond and how you can buy sovereign gold bond online.
Sovereign Gold Bond (SGB) is a non-physical way to invest in gold. Investors can hold gold bonds in demat, physical or e-certifcate format. RBI on behalf of government of India issue Sovereign Gold Bond. Each bond represents one gram of gold of 999 purity. The price of the bonds reflects the current price of gold.
The redemption price will be the simple average of gold in the last 3 business days. The price of 999 purity gold published by India Bullion and Jewelers Association Limited is considered.
Sovereign gold bond is open for subscription from June 8 to June 12, 2020. The bonds will be issued on 16th June, 2020.
Safe Investment option: Sovereign Gold Bond is a safe way to invest in gold as it is backed by the government of India. As it is not physical gold, risks associated with traditional gold jewellery is absent.
Returns/Interest rates: Sovereign gold bond tracks the price of gold. So, when the bonds mature, you will get proceeds equal to the prevailing gold price. You will also a fixed annual interest of 2.5% on the bonds that will be paid on a half-yearly basis.
Investment period: The tenure of the bonds is 8 years. However, you have the option to exit from the 5th year onwards.
Denomination: The bonds are denominated in units of one gram of gold.
Minimum and maximum limit: The minimum investment size is 1 gram of gold and maximum investment limit varies among the different classes of investors. The maximum limit for subscription for individuals and Hindu Undivided Family (HUF) is 4 kg i.e. 4000 units. The maximum investment limit for trusts and other such entities is 20 kgs.
There are various ways to buy sovereign gold bond. You can buy sovereign gold bond by visiting a post office or your banks, stock exchanges such as BSE and NSE, and the Stock Holding Corporation. You can easily buy sovereign gold bond online by logging in to the net banking platform of your bank.
Here we will see how you can buy sovereign gold bond online.
Kotak Net Banking
Kotak Mobile Banking
Your sovereign gold application is now placed. Keep your application id safely for future reference.
SBI account holders who haven’t applied for sovereign gold bond through SBI net banking has to register.
You have applied for gold bonds. Keep the details for future reference.
HDFC Bank customers can buy sovereign gold bond online through HDFC Bank’s net banking platform.
You have successfully applied. You will see details in the next screen. Keep a note of the details to avoid any inconvenience in the future.
In the next screen, you will get the confirmation of your application. Save the service request number for future reference.
|Series||Subscription Date||Issue Date|
|2020-21 Series IV||July 06-10,2020||July 14, 2020|
|2020-21 Series V||August 03-07, 2020||August 11, 2020|
|2020-21 Series VI||Aug.31-Sept.04, 2020||September 08, 2020|
Sovereign Gold Bond can act as a hedge instrument in your investment portfolio. It is a low risk investment option. Other than the gold returns, customers will also receive a fixed interest rate of 2.5% bi-annually.
Demat account is not required to invest in sovereign bonds. Physical and e-certificates will be provided to customers who don’t have a demat account.
Sovereign gold bond is tax free at maturity. However, in case of transfer, the tax on capital gains will be applicable as per the IT Act, 1961
The decline in gold prices is the risk in investing in sovereign gold bonds.
Government opens subscription window every 2-3 months. It remains open for about a week.
Sovereign Gold Bond allows you to take part in the movement of the gold prices. You cannot convert sovereign gold into physical gold. It is for your investment needs.
You can buy sovereign gold bond online through your bank’s net banking portal. The investment amount is debited from the account directly.
Contact us: firstname.lastname@example.org