How to Buy a Sovereign Gold Bond?

How to buy sovereign gold bond

Planning to invest in gold?
Here’s a smart way!
Let’s learn together about how to buy a sovereign gold bond.

What exactly are Sovereign Gold Bonds (SGB)?

Government securities are called SGBs which are valued in grams of gold. They are an alternative to holding actual gold. The issuance price is paid in cash by investors, and the bonds are redeemed in cash when they reach maturity. Also, the Reserve Bank issues the Sovereign Gold Bond on behalf of the Government of India.

Still confused to invest in sovereign gold bold. Below stated are key pointers to make an investment in SOVEREIGN GOLD BONDS!

  • ￲According to RBI guidelines, “Every application must be accompanied by the “PAN Number” provided to the investor(s) by the Income Tax Department because only the applicant’s PAN number is required.
  • ￲At the time of redemption Investor will receive the market value of the gold purchased originally.
  • ￲The persons ￲interested in investing in gold ￲can purchase these bonds and at the same time can earn interest.
  • ￲￲These bonds offer interest at the rate of 2.50% per annum on the initial investment. The investor gets interested semi-annually.
  • ￲￲These bonds are issued in the denomination of 1 gram of gold and its multiple.
  • ￲￲The minimum investment in bonds will be 1 gram and the maximum buying limit is 4 kilograms per person per year.

One can buy Sovereign Gold Bonds simply at any approved bank, such as SBI and HDFC, ICICI banks etc.

How to buy sovereign gold bond

Step – 1 The investor can submit an application for the same on the bank’s website under the ” Investment” tab.
Step -2 After that he/ she can apply for investment to any open series. Your Demat account will receive credit for the bonds.
Step-3 Now after the application is made and duly approved, the investor will receive interest on the investment.
(Note: These bonds offer interest at the rate of 2.50% per annum on the initial investment. Therefore the investor gets interested semi-annually)

How to buy sovereign gold bond
How to buy sovereign gold bond

Step-4 The investor gets the benefit of tax-free maturity, as SGBs mature at 8 years while they can be redeemed after 5 years.

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