How to Buy Sovereign Gold Bonds? Let’s find out!
Gold is a strategic asset used to diversify portfolios and reduce investment risks. Sovereign Gold Bonds (SGBs) are a better gold investment than physical gold. These bonds offer periodic interest and the market value of gold at maturity, making them appealing to investors. Learn about SGBs and investing in them.
What are Sovereign Gold Bonds (SGBs)?
Sovereign Gold Bonds are government securities issued by the RBI on behalf of India. Gram-denominated bonds linked to 999-purity gold prices. SGBs were introduced in 2015 under the Gold Monetisation Scheme to give investors a safe way to invest in gold without storing it.
Key Features of SGBs
Sovereign Gold Bonds come with several key features:
- Interest Income: SGBs offer a 2.5% annual interest rate, payable semi-annually. While the capital gains on redemption are tax-exempt, the interest income is taxable.
- Security and Liquidity: These bonds are considered secure investments, issued under the Government Security Act, 2006, and are available in both DEMAT and physical forms. They are also traded on stock exchanges, providing liquidity to investors.
- Collateral for Loans: SGBs can be used as collateral to secure loans.
- Tenure and Exit Options: The bonds have an 8-year tenure, with an option to exit after the 5th year on interest payment dates.
- Investment Limits: Individuals and Hindu Undivided Families (HUFs) can invest up to 4 kgs of gold per financial year, while trusts can invest up to 20 kgs. The minimum investment is 1 gram.
How to Buy Sovereign Gold Bonds
When the government releases SGBs in tranches, they can be bought. A weekly sale window opens each month. Banks, the Stock Holding Corporation of India, designated post offices, and stock exchange-authorized trading members sell SGBs during these periods.
SGBs can be bought online from listed commercial banks or the RBI. Online investors receive a ₹50 per gramme discount. Buying SGBs requires a PAN.
Investing in SGBs via Angel One Mobile App
Investing in SGBs through the Angel One mobile app is straightforward. Here’s how:
- Log into the App: Open the Angel One app and access the menu.
- Select SGBs: Navigate to “Investment Opportunities,” tap on “Sovereign Gold Bonds,” and choose the available series.
Place Your Order: Enter the quantity, review the payable amount, and tap “Invest.”
Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. It is based on several secondary sources on the internet and is subject to changes. Please consult an expert before making related decisions.