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Sovereign Gold Bonds
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- 2. What is SovereignGold Bonds (SGB)? ● SGB are substitutes for holding physical gold. ● These are Government securities denominated in grams of gold and can purchase as low as 1gm. ● The Bond is issued by Reserve Bank on behalf of Government of India. So it is a very safe instrument.
- 3. Who can Investin SGBs? Indian Citizens residing in India- defined under the Foreign exchange Management Act, 1999 can invest in Sovereign gold bond. Following are considered as eligible investors to finance in SGB: ● Individuals ● HUFs ● Education institutions- Universities ● Charitable organizations and trusts Those investors who have eventually changed their status from resident to non-resident and are holding SGBs are still eligible to hold SGB until early maturity/ exchange.
- 4. Benefits of SovereignGold Bonds (SGBS): ● No GST when purchase ● No Making Charges ● Assured Returns of 2.5% P.A. ● No Worry for Storage ● Liquidity - Tradable on stock exchanges ● Can use as collaterals for loans ● No Capital Gain Tax on Redemption ● Minimum 1 gram investment
- 5. What is theminimum and maximum limit for investment? ● Minimum investment in the Bond shall be one gram with a maximum limit of subscription of 4 kg for individuals. ● 4 kg for Hindu Undivided Family (HUF). ● 20 kg for trusts and similar entities notified by the government.
- 6. What is theprice at which bonds are sold? The bond's price is fixed and sold on the basis of a simple average of gold’s 999 purity closing price which is announced by the Indian Bullion and Jewellers Association Ltd. for the last 3 business days of the week- before the subscription period.
- 7. Who are theauthorized agencies selling the SGBs? Bonds are sold through offices or branches of: 1. Nationalized Banks 2. Scheduled Private Banks 3. Scheduled Foreign Banks 4. Designated Post Offices 5. Stock Holding Corporation of India Ltd (SHCIL) 6. Authorized stock exchanges either directly or through their agents.
- 8. Can I ApplyOnline? A customer can apply online through below link: https://www.investmentz.com/sovereign-gold-bond-scheme The issue price of the Gold Bonds will be ₹ 50 per gram less than the nominal value to those investors applying online and the payment against the application is made through digital mode.
- 9. Can I Getthe Bonds in Demat Form? Yes, the bonds can be held in demat account. A specific request for the same must be made in the application form itself. Till the process of dematerialization is completed, the bonds will be held in RBI’s books. The facility for conversion to demat will also be available subsequent to allotment of the bond.
- 10. Can I Tradethese Bonds? The bonds are tradable from a date to be notified by RBI. (It may be noted that only bonds held in demat form with depositories can be traded in stock exchanges) The bonds can also be sold and transferred as per provisions of Government Securities Act, 2006. Partial transfer of bonds is also possible.
- 11. Maturity Benefits ofSGB At the time of maturity the investor will get: ● The market value of the gold ● Periodic interest
- 12. What is theRedemption Process? 1. The investor will be notified a month before the maturity period. 2. On the day of the SGB maturity, the matured amount will be credited to the bank account based on the details available in the records. 3. In case of any change in the investor’s detail, e.g. change in the investor’s email ID, account number; it has to be notified to the bank/ SHCIL/PO immediately.
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