How to buy Sovereign Gold Bonds online

How to buy Sovereign Gold Bonds online

Investment in the Sovereign Gold Bonds (SGB) is only permitted to resident Indian entities, including as individuals, HUFs, Trusts, Universities, and charitable organisations. The bonds are bought by an investor through the internet banking facility and mobile apps for online applications. For investors applying online and paying against the application using the digital method, the issue price of the Gold Bonds will be Rs 50 per gram less than the nominal value. The bonds will be denominated in units of one gram of gold and multiples thereof.According to the HDFC Bank FAQs, “The bonds can be held in Demat account by making a specific request for the same at the time of application. 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.”

SGB redemption

The redemption price will be determined in Indian Rupees and will be based on the simple average of the closing price of 999-purity gold over the previous three business days as announced by the India Bullion and Jewellers Association Limited.

How to buy SGB online via ICICI Bank net banking

Step 1: Login ICICI net banking using credentials.
Step 2: Select Invest and Insure
Step 3: Select Sovereign Gold Bond

How to buy SGB online via SBI net banking

How to register for Sovereign Gold Bond(SGB)
Step 1: Login SBI Net Bankig using credentials
Step 2: Click on ‘e-Service’ from main menu
Step 3: Click on ‘ Sovereign Gold Bond Scheme’
Step 4: You must register if you are a first-time investor. Select ‘Register,’ from header tab then ‘Terms and Conditions,’ then ‘Proceed.’
Step 5: Enter all your details that are not auto-filled. Add nomination and other details.
Step 6: Choose the Depository participant from NSDL or CDSL where your demat account is held.
Step 7: Enter DP ID, Client ID and click ‘Submit’ tab
Step 8: Confirm the details and click ‘ Submit’ tab

How to buy Sovereign Gold Bond scheme through SBI

Step 1: Login SBI Net Banking using credentials
Step 2: Click on ‘e-Service’ from main menu
Step 3: Click on ‘Sovereign Gold Bond Scheme’
Step 4: Select ‘Purchase,’ from header tab
Step 5: Select the tab ‘Terms and Conditions’ tab and Click ‘Proceed’
Step 6: Enter ‘Subscription quantity’, nominee details
Step 7: Click on ‘Submit’
Step 8: Enter your OTP and click ‘Confirm’
In a new page you will find all the details of your SGB investments.

Advantages of sovereign gold bonds are:

  • Can be held in Demat format
  • In addition to returns based on gold prices, there is a 2.5% annual interest rate.
  • Tenure of a minimum of 8 years with an option to exit in the 5th, 6th, and 7th years
  • On the money invested and the interest, there is a sovereign guarantee
  • Trading bonds on exchanges could result in an early exit.
  • On redemption, the capital gains tax exemption applies.

Important FAQs on SGB, as per ICICI Bank

Can I buy 4Kg worth of SGB every year?
Yes. An individual can buy 4Kg worth of gold every year as the ceiling has been fixed on a fiscal year (April-March) basis.

How will I receive the acknowledgment of my investment in SGB?
SGB will be issued in either demat mode. The customers will be issued Certificate of Holding on the date of issuance of the SGB. Certificate of Holding will be sent directly to e-mail ID from RBI, if the e-mail ID is provided in the application form.

When will the bonds be redeemed and how can I redeem the Bonds?
The bonds will get matured after a period of 8 years. Premature redemption can be done from the 5th year onwards.

Are there any risks in investing in SGBs?
There may be a risk of capital loss if the market price of gold declines. However, the investor does not lose in terms of the units of gold which he has paid for.

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Author: Shirley