How to Buy Sovereign Gold Bonds Online – 3 Easy Steps
When it comes to gold, it has always been a symbol of prosperity, wealth as well as financial security, especially in India. In the contemporary market scenario, physical gold remains a popular choice for many. However, more investors today are turning to digital alternatives of gold like Sovereign Gold Bonds or in short SGBs. This genre of the bond was launched by the Reserve Bank of India (RBI) in 2015 on behalf of the Government of India. Since its inception, SGBs have become a modern, secure, as well as convenient way to invest in gold lessening the hassle of storage or the risk of theft.
In this blog, we’ll give you a walk-through guide on how to buy Sovereign Gold Bonds online, what makes them unique, the merits as well as risks involved, and key things to keep in mind as you step to invest in SGBs.
What are Sovereign Gold Bonds (SGBs)?
Sovereign Gold Bonds or RBI gold bonds are bonds that are issued by the government in relation to gold. Rather than purchasing gold in its physical form, you have the liberty to opt for these bonds which are directly linked to the market value of gold. This is how they operate:
Issuing authority: RBI on behalf of the Government of India.
Duration: Usually, 8 years with the possibility to exit after 5 years.
Interest: 2.50% per annum, paid semi-annually.
Minimum Investment: In multiples of 1 gram of gold.
Pricing: The price range is based on the average closing price of gold (999 purity) provided by the India Bullion and Jewellers Association Ltd or IBJA.
Who Can Invest in Sovereign Gold Bonds?
Eligible investors for this genre of bond investment include:
- Resident individuals
- Hindu Undivided Families
- Trusts
- Universities
- Charitable organizations
- Non-resident Indians (NRIs) are not eligible to invest in SGBs.
SGB vs Physical Gold
Before diving into the buying process, let’s look at why SGBs can become an attractive alternative for you to invest. Here is a checklist of SGB vs physical gold.
Safety – When it comes to Sovereign Gold Bonds, they are fully safe with zero theft risk. Compared with SGBs gold needs to be kept safely as the risk of losing is high.
Returns – Talking about gold bonds an investor can expect good returns with market value + 2.5% annual interest. Whereas, in gold, you can gain only market value appreciation.
Tax benefits – For gold bonds you need not pay any capital gains tax if held till maturity making it an attractive option for investment. For physical gold, you are subject to capital gains tax.
Storage – Sovereign Gold Bonds are purely a digital asset with no storage cost. But for physical gold, it requires safe keeping and you may need to pay banks for keeping gold in vaults.
Purity – For Sovereign Gold Bonds you always gain a purity of 999 (24K). But when it comes to physical gold purity may vary.
Methods of Purchasing Sovereign Gold Bond Online: A Detailed Guide
Many platforms allow for the purchase of SGBs online. If you are wondering how to buy Sovereign Gold Bonds here is a quick guide. The most common methods include:
1. Through your bank’s net banking portal
Almost all major banks in India offer the facility to apply for SGBs online. Here’s the general procedure:
Step 1: Log in to net banking
Go to your bank’s website and log in to the net banking portal with your proper credentials.
Step 2: Locate the SGB section
You can check under ‘Investments’ or ‘e-Services’ for a section titled “Sovereign Gold Bonds”.
Step 3: Do fill out the application
Make sure to enter the following information:
-Amount in grams you wish to purchase
-Provide demat account number
-Preference for holding: Physical or Demat.
Step 4: Confirm and pay
Be very careful to check the current issue price. There is usually a Rs. 50 per gram discount for online purchases of the SGBs. Complete the payment through the aid of net banking.
Step 5: Receive confirmation
After doing the required payment acknowledgment receipt along with the certificate of holding will be sent to you via email or the respective bank’s messaging system.
2. Through online demat accounts
Online demat accounts or applications like Zerodha, Groww, Upstox, etc can also aid you in your bond purchase. This is probably the simplest and most convenient method for you if you already trade in stocks.
Step 1: Access your trading account
Log into your respective broker’s mobile application or website.
Step 2: Look Up “SGB”
Enter “Sovereign Gold Bond” or “SGB” in the search bar to view the available series for purchase.
Step 3: Select and specify the quantity of the Bond
Before buying try to verify the pricing for the SGB series, select the unit quantity, and also try to confirm how many units you wish to purchase. Do remember 1 unit = 1 gram of gold.
Step 4: Place order and make payment
Complete the remaining steps on the screen to make payment. The SGB will be credited to your Demat account in a few days.
3. Through the RBI retail direct portal
RBI has launched a retail direct platform for small investors from where they can purchase RBI gold bonds seamlessly.
Step 1: Try to register on RBI retail direct
Remember KYC, PAN, and bank details are mandatory to provide.
Step 2: Select the SGB investment plan wisely
Navigate to the SGB section, select the issue, and apply.
Step 3: Make payment
Payment can be made with the help of internet banking or UPI.
When it comes to Sovereign Gold Bonds it imparts investors a clever safe, and profitable way to put money into gold — perfect for newcomers and experienced buyers alike. Investing money in this genre 0of bond means doing a safe gold investment in India. As more people use digital tools and the government encourages paperless investing, buying SGBs on the Internet has become a breeze. Whether you want to grow your wealth, spread out your investments, or just avoid the dangers of keeping physical gold, SGBs tick all the right boxes.
Try to make the most of online platforms, and try to be vigilant for when new bonds are issued. Remember to initiate with small amounts if you’re new to this. As time goes on, SGBs can become an integral part of your long-term plan to invest money.
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Disclaimer – This blog is for informational purposes only. Before conducting any investment, it is advisable to carry out comprehensive research.
People Also Ask (PAA) About How to Buy Sovereign Gold Bonds Online
- Can I buy Sovereign Gold Bonds without a Demat account?
You can seamlessly purchase SGBs without a Demat account through banks, post offices, or online portals. If you don’t have a Demat account, bonds come in certificate form.
- Which bank is best for buying Sovereign Gold Bonds online?
Big banks like SBI, HDFC, and ICICI allow you to buy SGBs online. Their platforms are user-friendly, and keep your transactions safe, and secure.
- Is it safe to invest in SGBs through mobile apps?
It’s safe to use and invest in approved and secure apps from banks, stockbrokers, or platforms that RBI recognizes.
- What documents are required to apply for SGB online?
To apply online, you will require a PAN card and your bank account details. Sometimes, you might also need to prove your identity or address with an Aadhaar or a passport.
- How has the price of Sovereign Gold Bonds been decided?
The price depends on the simple average of the closing price of 999 purity gold over the three business days before you subscribe.
- Can NRIs invest in Sovereign Gold Bonds in India?
NRIs are not eligible to invest in this genre of Sovereign Gold Bonds as per current norms of RBI.
- What happens when an SGB matures?
When these gold bonds mature, you can avail the prevailing market value of gold in rupees, along with the final interest payment directly credited to your account.
- Can I sell Sovereign Gold Bonds before maturity?
SGBs can be seamlessly sold on stock exchanges after seamless completion of the lock-in period. You can also be redeemed early with RBI under certain specific conditions after a tenure of five years.
- Is there any discount for buying SGBs online?
The government offers a discount of Rs. 50 per gram on the issue price for online applications paid digitally.
