With the Government of India’s Sovereign Gold Bond Scheme, investing in gold is much more easy, safe and secure. By investing in these bonds, you can earn guaranteed annual interest at the rate of 2.5% eliminating the risks associated with physical gold.
Gold is a traditional symbol of prosperity in India. It symbolizes wealth and there is no bigger status symbol than gold. Therefore, gold is more than an investment option in India.
There are a number of ways in which you can buy gold but SGBs is the best way to buy and store gold.
What are Sovereign Gold Bonds? How to buy Sovereign Gold Bonds? Where to buy SGBs? What are the benefits of Sovereign Gold Bond investment? What is the RBI Gold Bond rate?
To answer these questions, let us discuss in detail about SGBs.
Table of Contents
What are Sovereign Gold Bonds?
SGBs are government securities. SGBs are substitutes for investing in physical gold. Their value is denominated in grams of gold. These bonds are open for subscription in tranches by Reserve Bank of India on behalf of Government of India.
To buy the bond, you have to pay the issue price in cash. Your bond will be redeemed in cash on maturity at the prevailing market value of gold. You will also earn assured interest at the rate of 2.5 percent per annum.
Sovereign Gold Bond Scheme 2021-22 – Series X
RBI Sovereign Gold Bond Scheme 2021-22 – Series X is open for subscription from February 28 to March 4, 2022. The Sovereign Gold Bond price has been fixed at Rs.5,109 (Rupees Five Thousand One Hundred Nine only) per gram of gold.
The investors applying online and making the payments through digital mode will get a discount of Rs.50 per gram on the issue value. For such investors, the issue price of the bond would be Rs.5,059 per gram of gold.
The SGB bonds would be issued on March 8, 2022 after subscription is closed.
Benefits of Sovereign Gold Bonds
1. SGB gold bond is the safest way to buy and store gold. It offers an alternative to take exposure to gold without holding it in physical form. So there is no risk and no cost of storage.
2. You can earn 2.5% assured annual interest on the investment amount (no compounding of interest). The interest shall be credited half-yearly to the bank account of the investor.
3. Investors are assured of the gold’s market value at the time of maturity.
4. You will get indexation benefits on the transfer of bonds before maturity. There is no capital gains tax on redemption.
5. SGB bonds will be tradable on stock exchanges on a specific date as notified by the RBI.
6. SGBs can be used as collateral against secured loans.
7. In RBI gold bond, you pay only for the purest form of gold i.e. 24 karat pure gold.
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Six Golden Reasons to Invest in SGBs
As per a tweet by SBI Bank, “Here’s a golden opportunity! 6 golden reasons to invest in Sovereign Gold Bonds.”
Here's a golden opportunity!
6 golden reasons to invest in Sovereign Gold Bonds.
SBI customers can invest in these bonds on https://t.co/BGqZlfZBV9 under e-services.
Know more: https://t.co/H4BpchT1sI
#Gold #GoldBond #SGBWithSBI #AmritMahotsav #AzadiKaAmritMahotsavWithSBI pic.twitter.com/AL77reDyzv— State Bank of India (@TheOfficialSBI) February 25, 2022
Features of Sovereign Gold Bonds
1. The SGBs will be denominated in multiples of gram(s) of gold. The basic unit is 1 gram.
2. The minimum investment in SGB will be 1 gram of gold.
3. The maximum limit of subscription shall be 4 kg for individual and HUF. For trusts and similar entities, the maximum limit is 20 kgs.
4. The tenor of the bond is 8 years. However, you have an option to exit the bond from the 5th year. You can exercise this option only on the interest payment dates.
5. You can pay by cash (up to a maximum of Rs.20,000), cheque, demand draft or electronic banking.
6. The bonds will be available both in demat and paper form.
7. The investors will be paid interest at the rate of 2.50 percent per annum on the amount of initial investment. The interest is payable every half year.
8. You need to follow the same KYC norms as that for buying physical gold. KYC documents such as PAN or TAN, voter Id card, Aadhaar card or passport will be required.
9. On maturity, the bonds will be redeemed in Indian Rupees. The redemption price will be based on the previous 3 working days average of the closing price of gold of 999 purity.
10. There is no capital gains tax on redemption of SGB to an individual. You will get indexation benefits on the transfer of bonds.
Return of 73% in last 6 years
The price of the first Sovereign Gold Bond that was launched in the year 2015-16 was Rs.2684 per gram of gold. With a discount of Rs.50 per gram of gold, the price had come down to Rs.2634. The price of the current series of Sovereign Gold Bond has been fixed at Rs.4732 per gram of gold. With a discount of Rs.50, this price has now come down to Rs.4682. In this way, the SGB scheme has provided a return of 73% in the past 6 years.
Eligibility criteria to invest in the SGBs?
Resident Indians eligible to invest in SGB include individuals, HUFs, trusts, charitable institutions, and universities. You may also invest jointly with any other individual or on behalf of a minor child. The investors with a change in residential status from resident to NRI may continue to hold the bonds till early redemption/maturity.
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Where to buy Sovereign Gold Bonds?
You can buy SGBs from following channels either directly or through agents.
1. Scheduled Commercial Banks. There are 21 public sector banks, 21 private banks and 44 foreign banks in the list which sell these bonds. Click here to see the complete list of the banks.
2. Stock Holding Corporation of India Limited (SHCIL)
3. Designated Post Offices. There are 810 post offices on the list which sell these bonds. Click here to view the complete list of the designated post offices.
4. National Stock Exchange of India Limited
5. Bombay Stock Exchange Ltd
You can get the application form from the issuing banks, designated post offices, SHCIL offices, or agents. You can also download it from the RBI’s website. Banks also provide online application facility during the subscription period.
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How to buy Sovereign Gold Bonds online?
You can buy SGBs online via internet banking of most banks or through demat account. Here, I will show you how to buy Sovereign Gold Bond SBI online.
1. Visit SBI Official website (https://www.onlinesbi.com/).
2. Login to SBI Net banking portal using your username and password.
3. After logging in, click on “e-Services” tab on the main menu.
4. Next, you need to click on “Sovereign Gold Bond Scheme” option to apply for the bonds.
5. Here, you need to register yourself.
6. Accept terms & conditions and click on “Proceed” tab.
7. Fill the form and click on the “Submit” tab to complete registration.
8. Thereafter, fill the purchase form and submit to buy SBI Sovereign Gold Bond.
You are done! Note that SBI Gold Bonds are available online from 08.00 am to 08.00 pm during the declared tranche.
Buying Sovereign Gold Bond online through banks is very easy and quick. Moreover, you will get an additional discount of Rs.50 per gram on the issue price if you apply for the SGB online and the payment is made through the digital mode.
Sovereign Gold Bond Certificate Download
You can download your SBG bond online from the bank website from where you have purchased it. Just visit the bank’s website and login using your username and password. Go to investment option and then SGB bonds option. Click on the “Download Past Certificate” option and download your certificate. 
You can see the above screenshot of IndusInd bank for Sovereign Gold Bond certificate download.
Sovereign Gold Bond Scheme 2021-22
The government of India, in consultation with the RBI (Reserve Bank of India), has decided to issue Sovereign Gold Bond RBI. The Sovereign Gold Bonds (SGBs) will be issued every month from October 2021 to March 2022. The bonds will be issued as per the calendar specified below:
| S.No. | Tranche | Date of Subscription | Date of Issuance |
| 1 | 2021-22 Series VII | October 25–29, 2021 | November 02, 2021 |
| 2 | 2021-22 Series VIII | Nov. 29- Dec. 03, 2021 | December 07, 2021 |
| 3 | 2021-22 Series IX | January 10-14, 2022 | January 18, 2022 |
| 4 | 2021-22 Series X | Feb. 28- Mar. 04, 2022 | March 08, 2022 |
The Sovereign Gold Bond Scheme 2021-22 – Series X is open for subscription for the period from February 28 – March 4, 2022. The SGB gold bond price fixed at Rs.5,109 (Rupees Five Thousand One Hundred Nine only) per gram with Settlement Date being 8th March, 2022.
In consultation with the Reserve Bank of India, the government of India, has decided to offer an additional discount of Rs.50 per gram on the issue price to those investors applying online and the payment made through the digital mode. For such investors, the issue price of the bond will be Rs.5,059 per gram of gold.
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FAQs – Frequently Asked Questions
1. What is SGB?
SGBs are government securities. They are considered safe. They are substitutes for investing in physical gold. Their value denominated in grams of gold. SGBs are open for subscription in tranches by RBI on behalf of Government of India.
2. What is the price of SGB?
The issue price for Sovereign Gold Bond has been fixed at Rs.5,109 per gram of gold.
3. How do I apply for SGB online?
You can apply for SGB online and offline as well. You can apply online either via internet banking of listed banks, SHCIL and Demat accounts of other brokers.
4. What happens to SGB after maturity?
At the time of maturity, the Gold Bonds shall be redeemed in Indian Rupees. The redemption price will be based on the average of closing price of gold of 999 purity of previous 3 business days from the date of repayment.
Sovereign Gold Bond Returns
Returns in the SGB scheme will depend on the prevailing market value of gold on maturity or on premature exit. This scheme allows you to add gold in your portfolio, without owning gold in physical form. You can also earn an annual interest rate of 2.5% on your investment.
In simple words, Sovereign Gold Bonds means owning gold and earning guaranteed interest on the investment amount. This is the only gold-linked investment scheme that earns assured interest.
Note: This post was originally published on July 12, 2019 and has been completely updated for accuracy and comprehensiveness.
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Nice post.
Some great information on SGBs.
Thanks Neeraj !
Thanks!
Nice information. . Could you please also mention how we can get a holding certification in this case?