Sovereign Gold Bond Scheme’s 7th Tranche Opens Today, Here’s How to Buy Them

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October 12, 2020

Sovereign gold bonds (SGB) can be purchased in both offline and online modes.

The RBI has said the issue price for the SGB Scheme 2020-21 Series VII has been fixed at Rs 5,051 per gram of gold, however, investors applying for the issue online will get a concession of Rs 50 per gram, their base price will be Rs 5,001 per gram.

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Last Updated: October 12, 2020, 2:16 PM IST
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The Reserve Bank of India (RBI) has announced the issuance of the seventh tranche of Sovereign Gold Bond (SGB) Scheme for 2020-21, the issue will open on today October 12 and close on Friday, October 16. The RBI has said the issue price for the SGB Scheme 2020-21 Series VII has been fixed at Rs 5,051 per gram of gold, however, investors applying for the issue online will get a concession of Rs 50 per gram, their base price will be Rs 5,001 per gram. The tenure of the Bond will be for a period of eight years with exit option in fifth year, to be exercised on the interest payment dates.

Sovereign gold bonds (SGB) was an initiative launched by the Government of India in 2015 as a substitute provision to invest in gold instead of owning gold in physical form. Investors pay the issue price in cash through online or offline modes and the SGB bonds are bought for a certain monetary value which are backed by an equal amount of gold. Investors are assured of the market value of gold at the time of maturity and periodical interest.

How to Buy Gold Bonds Online?

Sovereign gold bonds (SGB) can be purchased in both offline and online modes. Online investors get a RBI-mandated discount of Rs 50 per gram on the purchase value. Online investment can be done either through listed banks, 12 public sector banks, 22 private banks and 44 international banks can offer SGBs according to an RBI notification dated April 13, 2020. The bonds can also be bought online through SHCIL and authorised brokers.

How to buy them online through banks:

1. To invest through banks, you will need to have a valid net banking account. Log in to your net banking account.

2. Click on the SGB option which will generally be available on the banks home page or listed under services tab. For better visibility usually, banks run ads on their homepage for ease of navigation and investment.

3. Click on the SGB option on your bank’s homepage, it will land you on the registration page log-in with your net banking details. Net banking account with a bank assumes the application/applicant is KYC compliant.

4. Once you land on the SGB registration page the customer may or may not get a pre-filled form, as this service varies from bank-to-bank.

5. If a pre-filled form is not an option, the customer/investor needs to fill in their name, address, guardian’s name (in case of minor), PAN number and name of the nominee details.

6. Enter the number of units you want to purchase, with minimum permissible investment will be 1 gram of gold and a maximum limit of four kilograms for individual, Hindu Undivided Family (HUF) and 20 kilograms for trusts and similar entities.

7. If the customer meets the eligibility criteria, produces a valid identification document and remits the application money on time, he/she will receive the allotment.

Buying SGBs through SHCIL, Brokers:

SGBs can be purchased through the StockHolding Corporation of India Limited (SHCIL ) website by clicking here.

The difference here is you buy the gold bonds by filling up the application form similar to the online form with your Demat accounts. Once purchased the SGB units get credited in your Demat account. These bonds can be traded or exit them before maturity once they are listed.

Exchanges:

The process remains the same as above, the customer needs to have an operational Demat account. Once listed you may choose to sell your gold bonds or trade them on the exchanges at any time during the tenure of the bond.

How to purchase the bond Offline:

The application form will be provided by the issuing banks/SHCIL offices/designated Post Offices/agents.

It can also be downloaded from the RBI’s website.

Further details can be read here.

Sovereign Gold Bond Scheme’s 7th Tranche Opens Today, Here’s How to Buy Them

The RBI has said the issue price for the SGB Scheme 2020-21 Series VII has been fixed at Rs 5,051 per gram of gold, however, investors applying for the issue online will get a concession of Rs 50 per gram, their base price will be Rs 5,001 per gram.

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