SBI Sovereign Gold Bond

Investing in gold has become much easier with SBI Sovereign Gold Bond, an investment scheme that was introduced in 2015 in collaboration with the Reserve Bank of India (RBI). The SBI Gold Bond is a perfect alternative to buying physical gold without the hassle and risks that are usually associated with it. Allowing you to enjoy the many benefits of Investing in gold including attractive interest rates and high safety on your investment.

With SBI Gold Bonds, you can invest in gold without worrying about security, storage, or purity issues. The bonds can be invested in grams of gold with an additional interest rate of 2.5% p.a. besides profits from appreciation in gold prices. They also offer flexibility as they can be easily traded in stock exchanges and can be used as collateral for loans.

Table of Contents:

• ⇾ SBI Sovereign Gold Bond Details
• ⇾ SBI Sovereign Gold Bond Eligibility
• ⇾ Documents Required To Purchase SBI SGB
• ⇾ Interest Payment on SBI Sovereign Gold Bond
• ⇾ Servicing of Sovereign Gold Bond
• ⇾ Redemption of Sovereign Gold Bond
• ⇾ Transfer of Sovereign Gold Bond
• ⇾ Trading of SBI Sovereign Gold Bond
• ⇾ Features & Benefits of SBI Sovereign Gold Bond
• ⇾ Steps to Buy a SBI Sovereign Gold Bond
• ⇾ Frequently Asked Questions

SBI Sovereign Gold Bond Details

The table below will provide you with the details of the SBI SGB and what it offers:

SBI Sovereign Gold Bond Eligibility

The SBI SGB can be purchased by any of the following:

• Individual
• Guardians on behalf of a minor child
• Individuals opening a joint account with another individual
• Hindu Undivided Families (HUFs)
• Trusts
• Universities
• Charitable institutions.

Documents Required To Purchase SBI SGB

If you want to purchase an SBI sovereign gold bond, you will need to prepare the following documents:

• Know-Your-Customer (KYC) documents: Voter ID, Aadhaar card, and Passport.
• Financial documents: PAN or TAN

Interest Payment on SBI Sovereign Gold Bond

The State Bank of India Gold Bonds offer similar benefits that you get with traditional buying of gold along with the added benefits of the gold bond being a financial instrument. The interest rate offered by SBI SGB is an attractive feature that you cannot enjoy when buying and storing physical gold. With SBI gold bonds, you can get regular interest payouts. Providing you with a regular income stream while being a safe and profitable asset.

You can enjoy an attractive interest rate of 2.5% p.a on the nominal value of the investment, which is paid directly to your bank account semi-annually. The servicing of SBI SGB interest ensures that you get a regular income stream on top of the capital appreciation that you are getting which is linked to the gold price.

Redemption of Sovereign Gold Bond

State Bank of India Sovereign Gold Bonds can be invested for a tenure of 8 years. However, there is an option for early redemption from the 5th year onwards on the date of interest payment. The redemption price will be linked to the prevailing market rate of gold as provided by the Reserve Bank of India (RBI). Allowing you to benefit from the appreciation in gold price throughout the investment.

Transfer of Sovereign Gold Bond

With an SBI gold bond, you can easily transfer it to another person or investor. The process of transferring the bond is simple, if you are holding the bonds in demat form, you can easily transfer it through the depository participant. However, if you are holding the bond in physical form, you can transfer it through the Bank or Post Office. To transfer the SBI SGB, you will be required to fill up the application form, and nomination form and fulfill certain KYC details.

Trading of SBI Sovereign Gold Bond

You can also trade your SBI SGB on stock exchanges within a fortnight of its issuance. Providing you liquidity and the opportunity to take advantage of the market conditions or meet emergency financial needs without waiting to fulfill the redemption period.

Features & Benefits of SBI Sovereign Gold Bond

Diversify your portfolio with an SBI sovereign gold bond as it offers unique features and benefits that you can enjoy, these are:

• The sovereign gold bonds will be issued by the Reserve Bank of India.
• The bonds are measured in grams of gold.
• The minimum investment is 1 gram while the maximum investment is 4 kgs for individuals and HUFs and 20 kgs for Trusts and similar entities.
• The minimum investment for joint accounts is 4kgs.
• Redemption tenure is 8 years, however, premature redemption can be done in the 5th, 6th, and 7th year.
• The interest rate offered is 2.50% p.a. paid semi-annually.
• Investors who are buying the bond online can get a discount of ₹50 per gram from the nominal value.
• Payments for the bonds can be made via cash (up to ₹20,000), demand draft, cheque, or electronic banking.
• You can add your nomination during investment, except for investments made on behalf of a minor.
• The interest on the bonds is taxable under the Income Tax Act of 1961. While capital gains tax on redemption for individuals is exempted. And long-term capital gains you get from transferring the bonds will get indexation benefits.
• The bonds will be issued under the Government Securities Act, 2006, where you will get a Holding Certificate, and the bonds can be converted into demat form.
• The redemption price will be in Indian Rupees, based on the simple average of the closing price of gold of 999 purity, over the previous three working days as published by IBJA
• All branches of the State Bank of India can accept subscriptions.
• The SBI SGB Bonds can be used as collateral for loans, with the loan-to-value ratio set according to the RBI's guidelines. The lien on the bond will be marked in the depository by the banks.
• The bonds can also be traded on stock exchanges within a fortnight of issuance, as notified by the RBI.

Steps to Buy SBI Sovereign Gold Bond

Buying SBI SGB has become easier through online bank platforms and websites, here are the steps that you can follow to buy an SBI gold bond:

• Step 1: Log in to your SBI internet banking account.
• Step 2: Visit the e-services section and select ‘Sovereign Gold Bond’
• Step 3: Properly read the terms and conditions, then click proceed.
• Step 4: Fill in the application form and enter the details for your nominee and the quantity you wish to subscribe.
• Step 5: Upload all the required documents, if any.
• Step 6: Review all the entered information, then click ‘Submit’ to finalise your purchase.

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