What is a Sovereign Gold Bond? Features, Benefits & How to Buy Online

Sovereign Gold Bonds (SGBs) are digital or paper-based gold investments. The Government of India issues these, and they track the market price of gold. So, you don’t have to worry about holding it or holding your head with a headache.

In simple words:

SGB = Gold ka digital version + Guaranteed interest + No storage stress

Why Choose Sovereign Gold Bonds (SGBs)?

‘Sona kisko nahi pasand!’

With festivals like Janmashtami, Raksha Bandhan, and Dhanteras, our family finds joy in celebrating with gold. While buying gold is easy, storing it at home is risky, and let’s not forget the high jewellery-making charges!

That is why one must go for Sovereign Gold Bonds (SGBs). It’s India’s official digital gold, and it pays you 2.5% annual interest just for holding it. No worries about lockers, theft, or extra charges. "Aaram se so sakte ho ab to!"

Sounds exciting, right? That’s why we’ve created this blog. Here, you’ll learn what SGBs are, their top features, and how you can buy them online.

Main Features/ Benefits of SGBs

Let’s see why we are recommending SGBs. Here are the features that make them a smarter way to invest in gold:
 

These features give you the best of both worlds: the value of gold and the convenience of paper or digital format. Let’s see an example.

For example, Ravi wants to gift his daughter gold for her future, but he's worried about safety and locker charges. Instead, he buys 10 grams of SGBs worth ₹62,630. Not only is her gold secure, but she also earns ₹1,550 annually in interest! ‘College ki taiyari Crib mein hi!’

How to Buy Sovereign Gold Bonds (SGBs) Online 

Buying gold bonds online is much easier than it sounds. You don’t need to visit any office or fill out big forms. If you have used a mobile app or net banking before, even once, you can do this!

Let’s break it down further:

Step 1: Wait for the Right Time

You can’t buy SGBs anytime you want. The government opens a 5-day window a few times a year to let people invest. So, you just need to check when the next SGB is available. Your bank’s website or mobile app will show it, or you can check SGB’s availability on RBI Retail Direct. 

Step 2: Decide Where You Want to Buy From

You can buy SGBs by downloading the application form provided by the issuing banks/SHCIL offices/designated Post Offices/agents. Or you can also go for Netbanking. Here, we have provided you with the links for the banks and the forms required. 

• SBI NetBanking / YONO SBI 

Click on the link. Download the “Sovereign Gold Bonds Scheme (SGB) application form”, fill and submit it to the bank. You can also use the YONO app.

• HDFC Bank NetBanking / Demat 

Go to the “Invest” tab in your banking portal. Under “Bonds and Securities”, click on “Sovereign Gold Bonds”

• ICICI Bank Internet Banking / iMobile 

Click on the link and log in with your net banking details.

• RBI Retail Direct
  It is the official channel of the RBI. Print the application form, fill in the information asked submit it to your bank. 

Step 3: Detailed Explanation For The Netbanking Process. 

Here’s what you’ll need to do:

1. Log in to your bank’s net banking portal using your credentials.
    
2. Go to the ‘eServices’ or ‘Investments’ section and click on ‘Sovereign Gold Bond.’
    
3. Read through the instructions and agree to the terms by clicking ‘Proceed.’
    
4. Fill in your details in the registration form and click ‘Submit.’
    
5. Enter how much gold (in grams) you want to buy and provide the nominee information.
    
6. Review all your details once more and hit ‘Submit’ to complete your application.

Step 4: Get Your Gold Bond Certificate

After a few days (usually 1 week), you will receive a Certificate of Holding on the issue date. You can collect it from your bank, post office, SHCIL, stock exchange, or get it by email if you provided your email ID during the application.

Keep that certificate safe. This is proof that you have invested in gold.

Who Can Invest in a Sovereign Gold Bond (SGB) Scheme?

If you live in India and want to invest in gold without buying physical gold, you’re most likely eligible! We have enlisted all the eligible investors in the table given below. Check if yours is mentioned or not.
 

You need to be a resident Indian as per FEMA rules at the time of investment. If you become an NRI later, you can continue to hold the bond until it matures.

What Are the Minimum and Maximum Investment Limits in SGBs?

Whether you are a small saver or a large investor, there's room for everyone. With different types of investors, the range for buying SGBs is different. We have discussed the upper and lower limits of investment with respect to the type of investor in the table given below.
 

This limit includes all SGB purchases made across multiple tranches and even bonds bought from the secondary market (stock exchanges).

Conclusion

Gold has been proven to be one of the best investments in recent years. Today, everyone wants to buy gold; the investment is the same, but the perception has changed. Now, no one wants the hassle of storing the gold; that is why they go for SGB (Sovereign Gold Bonds). You need not go to any jeweller and pay more than the actual gold price; just register it online via NetBanking.

Sovereign Gold Bonds offer a smart, safe way to invest in gold. They are ideal for Indian residents looking for long-term returns, with flexible limits and guaranteed interest. So remember, ‘Sona, Sona hota hai, bas kharidne ka tareeka badal gya!’ 

Frequently Asked Questions

What’s the price of these gold bonds?
The bond price is set in rupees based on the average closing price of 999 purity gold for the last 3 working days before the subscription week, as published by the India Bullion and Jewellers Association (IBJA).

Does the RBI update the gold price daily?
No, the RBI announces the applicable SGB price for each issue two days before the subscription window opens. You can check this on their official site.

How much will I get when the bond matures?
On maturity, you’ll be paid in rupees based on the average gold price (999 purity) of the last 3 working days before redemption, as per the IBJA data.

Can I redeem the bond before 8 years?

Yes, although the Sovereign Gold Bond (SGB) has a maturity period of 8 years, you can redeem it early after completing 5 years, but only on the interest (coupon) payment dates. If your SGB is in demat form, you can also sell it on stock exchanges before maturity or transfer it to another eligible investor.

How can I exit my SGB investment before maturity?

If you wish to redeem your bond early, visit your bank, post office, SHCIL office, or agent 30 days before the interest payout date. Make sure your request reaches the issuing authority at least 1 day before the coupon date. The money will be credited to the bank account you mentioned while applying for the bond.

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LoansJagat Team

We are a team of writers, editors, and proofreaders with 15+ years of experience in the finance field. We are your personal finance gurus! But, we will explain everything in simplified language. Our aim is to make personal and business finance easier for you. While we help you upgrade your financial knowledge, why don't you read some of our blogs?