How to Buy Sovereign Gold Bond Online 1

Sovereign Gold Bonds (SGBs) are government-backed securities that offer an excellent investment opportunity to those looking to invest in gold. SGBs are a safer and more convenient option than physical gold as they eliminate the need for storage and security. Investors can purchase SGBs in various denominations, and they are tradable on stock exchanges. In this article, we will discuss how to buy Sovereign Gold Bonds online.



To buy SGBs online, investors must first have a demat account and a PAN card. They can then visit the website of their preferred bank and follow the SGB online purchase guide to complete the transaction. The Reserve Bank of India (RBI) issues SGBs on behalf of the Government of India, and investors can purchase them through designated banks, the Stock Holding Corporation of India, and select post offices.

Investors can purchase SGBs at the current market price of gold and receive interest on their investment. SGBs are an excellent long-term investment as they come with a tenor of eight years, and investors can also avail of tax benefits on their investment. By following the SGB online purchase guide, investors can easily invest in gold and diversify their investment portfolio.


Key Takeaways

  • SGBs are government-backed securities that offer a safer and more convenient option to invest in gold.
  • Investors can purchase SGBs online through designated banks, the Stock Holding Corporation of India, and select post offices.
  • SGBs are an excellent long-term investment with a tenor of eight years and offer tax benefits to investors.

1) Understanding Sovereign Gold Bonds

Sovereign Gold Bonds (SGB) are government securities denominated in grams of gold. They are issued by the Reserve Bank of India (RBI) on behalf of the Government of India. SGBs are a popular investment option for investors looking to invest in gold without the hassle of physical gold.

Features and Benefits

SGBs offer several features and benefits to investors, including:

  • 999 purity: SGBs are issued in 999 purity, making them a pure investment in gold.
  • Sovereign guarantee: SGBs are backed by the Government of India, providing investors with a sovereign guarantee on their investment.
  • Tax benefits: SGBs offer tax benefits to investors, including exemption from capital gains tax on redemption and indexation benefits for long-term capital gains tax.
  • Interest: SGBs offer an annual interest rate of 2.5% payable semi-annually on the initial investment amount.
  • Liquidity: SGBs can be traded on stock exchanges, providing investors with liquidity in the secondary market.

Eligibility and Subscription Limits

SGBs are open to individual investors, Hindu Undivided Families (HUFs), trusts, and other specified entities. The minimum investment in SGBs is 1 gram of gold, and the maximum investment is 4 kg for individuals and HUFs and 20 kg for trusts and similar entities.

Purchasing Process

SGBs can be purchased through banks, post offices, and online platforms. The subscription period for SGBs is typically open for a few days, and the bonds are issued in tranches. The online purchase process involves registering on the website of the bank or post office and providing the necessary details. Payment can be made through net banking or other electronic payment methods.

Pricing and Payment Methods

The issue price of SGBs is determined by the RBI based on the prevailing market price of gold. Payment for SGBs can be made in Indian rupees or through physical gold.

Interest and Redemption

SGBs offer an annual interest rate of 2.5% payable semi-annually on the initial investment amount. The redemption price of SGBs is based on the prevailing market price of gold at the time of redemption. Interest payment dates and redemption dates are pre-specified by the RBI.

Taxation and Compliance

SGBs offer tax benefits to investors, including exemption from capital gains tax on redemption and indexation benefits for long-term capital gains tax. Investors are required to provide their PAN or TAN details and self-declaration of compliance with the relevant tax laws.

Secondary Market and Liquidity

SGBs can be traded on stock exchanges, providing investors with liquidity in the secondary market. The market price of SGBs is influenced by the prevailing market price of gold and past performance.

Risks and Considerations

Investors should consider the risks and considerations associated with investing in SGBs, including market price risk, liquidity risk, and past performance risk.

Exit Strategy

Investors can exit SGBs before maturity by selling them on stock exchanges. The option to exit is available after the fifth year from the date of issue.

Additional Investment Options

Investors looking to invest in gold can also consider other investment options such as physical gold, gold investment through mutual funds, and government securities like Gold Monetisation Scheme.

Overall, SGBs are a popular investment option for investors looking to invest in gold with the added benefits of a sovereign guarantee and tax benefits.


2) SGB Online Purchase Guide

Investing in Sovereign Gold Bonds (SGB) has become increasingly popular among investors in India. The process of purchasing SGBs online has been made simple and convenient by the Reserve Bank of India (RBI) and various banks. Here is a step-by-step guide on how to buy SGBs online.

Registration and Documentation

Before investing in SGBs, investors must first complete the registration process. This involves submitting the necessary documentation, including a PAN card, nominee details, and a demat account. Investors can register online through the websites of banks such as SBI, Canara Bank, and HDFC Bank.

Online Transaction Steps

Once the registration process is complete, investors can proceed with the online transaction. This involves logging into their net banking account and selecting the SGB option. Investors can then choose the subscription quantity and make the payment using their bank account.

Important Dates and Reminders

It is important to keep track of the subscription period and the date of issuance for each SGB series. The RBI issues press releases with the relevant dates and information for each series. Investors should also be aware of the minimum and maximum subscription limits for each series.

Customer Support and Resources

For investors who require assistance or have questions, banks and the RBI offer customer support and resources. These include frequently asked questions (FAQs), educational resources, and contact information for customer support.

Investing in SGBs online can be a simple and convenient process for investors. By following the steps outlined in this guide and using the available resources, investors can confidently invest in SGBs and enjoy the benefits of fixed interest and potential capital gains.


3) Frequently Asked Questions

What are the steps to purchase Sovereign Gold Bonds online through banks like SBI or HDFC?

Investors can purchase Sovereign Gold Bonds online through banks like SBI or HDFC by following these steps:
1. Visit the bank’s official website and log in to the net banking portal.
2. Look for the option to invest in Sovereign Gold Bonds.
3. Fill in the required details such as the amount of investment and other personal details.
4. Make the payment through net banking or other digital payment modes.
5. Once the payment is successful, the bond will be credited to the investor’s demat account.

How can one invest in Sovereign Gold Bonds via brokerage platforms such as Zerodha?

Investors can invest in Sovereign Gold Bonds via brokerage platforms such as Zerodha by following these steps:
1. Log in to the Zerodha account.
2. Search for Sovereign Gold Bonds in the search bar.
3. Click on the Sovereign Gold Bond option and select the issue date.
4. Fill in the required details such as the amount of investment and other personal details.
5. Make the payment through net banking or other digital payment modes.
6. Once the payment is successful, the bond will be credited to the investor’s demat account.

What is the minimum amount required to invest in Sovereign Gold Bonds?

The minimum amount required to invest in Sovereign Gold Bonds is 1 gram of gold, and the maximum amount is 4 kg for individuals and HUFs.

How can I find the current rate for Sovereign Gold Bonds before making a purchase?

Investors can find the current rate for Sovereign Gold Bonds on the Reserve Bank of India’s official website or by visiting the bank’s website where they plan to make the purchase.

Is there a specific calculator available to estimate returns on Sovereign Gold Bond investments?

Yes, investors can use the Sovereign Gold Bond calculator available on the Reserve Bank of India’s official website to estimate returns on their investments.

Where and how can I download the certificate for my Sovereign Gold Bond investment?

Investors can download the certificate for their Sovereign Gold Bond investment from the bank’s official website or from the Reserve Bank of India’s official website. The certificate can be downloaded in a PDF format, and investors can use it for various purposes such as tax filing or as proof of investment.


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