How to invest in the recently issued RBI gold sovereign bond program?



oi-Kuntala Sarkar


The RBI recently issued the Sovereign Gold Bond (SGB) Scheme 2021-22 – Series V for underwriting. This tranche will be open from today (August 9) to August 13, 2021. The price of gold will settle at Rs. 4,790 per 1 gram of gold. The face value of the bond is based on the simple average of the closing prices of 999 purity gold for the last three business days of the week preceding the subscription period. Investors who apply online will be offered an additional discount of Rs. 50 per gram less than face value. For them, the issue price of a gold bond will be Rs. 4,740 per 1 gram of gold.

How to start the investment procedure?

As the RBI issued its fifth tranche of the SGB program, investors are waiting for it – the steadily declining gold prices are now driving more people towards gold investments.

The procedure for investing in SGB begins with filling out the SGB application form. The application form is provided by issuing banks or offices of Stock Holding Corporation of India Limited (SHCIL) or designated post offices or agents. The form is also available on the official RBI website. Banks now also offer online application services.

The application form must be accompanied by Know-Your-Customer (KYC) standards. It will require a “PAN number” issued by the income tax service to the investor.

The investor is only allowed to hold a single “unique investor identifier” linked to one of the prescribed identification documents. The unique investor ID will be used for all subsequent investments in the program. the listing of the PAN in the application form is compulsory for the holding of securities in dematerialized form (Demat). A given email id will receive a confirmation email after confirming the purchase.

In case of investment via SBI, the application form is available on the official SBI website ( under e-services. Likewise, on the sites of other banks, the form will be available. Alternatively, investors can directly contact their relevant bank branch to invest in SGB.

SGBs are also listed on the stock exchange 10 to 15 days after issuance and can be traded. If an investor wants to buy SGB through Zerodha on the stock exchange, they will first need to log into their Zerodha account. Then the page “Investing in Gold Bonds and ETFs” should be reached. Make sure you have sufficient funds in the equity account on the last day of the issue. Then, under SGB, the price, the quantity to be invested (SGB units) and the supply dose must be entered. Thus, an investor can place the required order. The units will be allocated to the Demat account within 10 working days and a confirmation email will be sent.

Who can invest in SGBs?

A person residing in India is eligible to invest in SGB. Eligible investors include individuals, Hindu Undivided Families (HUFs), trusts, universities, and charities. Individual investors with subsequent changes in resident status from resident to non-resident may continue to hold SGBs until early redemption / maturity.
Joint detention of SGB is permitted. In addition, guardians can also apply for GBS on behalf of a minor for the child’s future.

The Bonds are issued in denominations of one gram of gold and in multiples thereof. The minimum investment in the bond is one gram with a maximum subscription limit of 4 kg for individuals, 4 kg for the Hindu undivided family (HUF) and 20 kg for trusts and similar entities. In the case of joint ownership, the limit is 4 kg. The annual cap will include bonds subscribed in different tranches upon initial government issuance and those purchased on the secondary market.

Advantages of SGB

The Bonds bear interest at a rate of 2.50% per annum (semi-annual basis) on the amount of the initial investment. The last interest will be payable at maturity with the principal.

There will be no capital gains tax upon redemption and it can be used as collateral for loans. For SGB, there is no financial pressure associated with charging fees, GST or storage charges. SGB ​​offers an easy liquidity option as it can be traded in the secondary market.


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