Sovereign Gold Bond

Posted on 9th Sep 2016
by TopShareBrokers Team

Need help choosing a broker?

Name Phone
Email City
Sovereign Gold Bond

Sovereign Gold Bond(SGB)

Sovereign Gold Bonds (SGBs) are government securities denominated in grams of gold. They are substitutes for holding physical gold. Investors have to pay the issue price in cash and the bonds will be redeemed in cash on maturity. The Bond is issued by Reserve Bank on behalf of Government of India.

Investors can buy these bonds through NSE/BSE at issue price when RBI announces a fresh sale or they can purchase it immediately through NSE/BSE at current price like any other security.

Investors can redeem these bonds for cash upon maturity of the bonds or can sell it on NSE/BSE at current prices.

Sovereign Gold Bonds Schema History
Bond Official Name NSE Name NSE Code Subscription Date Issue Date Closing Price Redemption Interest Status
Sovereign Gold Bonds 2017-18 – Series II Sovereign Gold Bonds 2.50% July 2025 SGBJUL25 July 10, 2017 to July 14, 2017 28-July-17 Rs 2850 July-25 2.50% PA - Paid half-yearly Close
Sovereign Gold Bonds 2017-18 – Series I Sovereign Gold Bonds 2.50% MAY 2025 SGBMAY25 April 24, 2017 to April 28, 2017 12-May-17 Rs 2901 May-25 2.50% PA - Paid half-yearly Close
Sovereign Gold Bond Scheme 2016 -17 – Series IV Sovereign Gold Bonds 2.50% FEB 2025 SGBMAR25 February 27, 2017 to March 3, 2017 17-Mar-17 Rs 2893 Mar-25 2.50% PA - Paid half-yearly Close
Sovereign Gold Bond Scheme 2016 -17 – Series III Sovereign Gold Bonds 2.50% NOV 2024 SGBNOV24 October 24, 2016 to November 2, 2016 17-Nov-16 Rs 2957 Nov-24 2.50% PA - Paid half-yearly Close
Sovereign Gold Bonds 2016-17 – Series II Sovereign Gold Bonds 2.75% SEP 2024 SGBSEP24 Sep 01,2016 to Sep 09,2016 23-Sep-16 Rs 3150 Sep-24 2.75% PA - Paid half-yearly Close
Sovereign Gold Bonds 2016-17 – Series I Sovereign Gold Bonds 2.75% AUG 2024 SGBAUG24 Jul 18,2016 to July 22,2016 5-Aug-16 Rs 3119 Aug-24 2.75% PA - Paid half-yearly Close
Sovereign Gold Bonds- 2016 Series-II Sovereign Gold Bonds 2.75% MAR 2024 SGBMAR24 March 8,2016 to March 14,2016 29-Mar-16 Rs 2916 Mar-24 2.75% PA - Paid half-yearly Close
Sovereign Gold Bonds, 2015-16 Sovereign Gold Bonds 2.75% FEB 2024 SGBFEB24 January 18, 2016 to January 22, 2016 8-Feb-16 Rs 2600 Feb-24 2.75% PA - Paid half-yearly Close
Sovereign Gold Bonds, 2015-16 Sovereign Gold Bonds 2.75% NOV 2023 SGBNOV23 November 05, 2015 to November 20, 2015 26-Nov-2015 Rs 2684 Nov-23 2.75% PA - Paid half-yearly Close

Sovereign Gold Bond - RBI Press Releases

Why Sovereign Gold Bonds are more popular and getting market heat?

Investors are going to get 2.50% per annum (Fixed rate) interest on initial investment. Interest will be credited semi-annually to the bank account of the investor and the last interest will be payable on maturity along with the principal. In such case if you are planning to buy physical gold for investment, this bond is giving same advantage + extra interest of 2.50% PA.As well as you can use this bound for collateral for loans.

What are the key advantage of investing in Sovereign Gold Bonds vs buying physical gold coin or jewellery for investment?

  • No hassle to hold physical gold.
  • Risks and costs of storage are eliminated.
  • Assurance of market rate on maturity.
  • Periodical interest of 2.50% PA.
  • Minimum investment: 1 gram. Maximum investment: 500 grams
  • Saving on making charges in case of jewellery.
  • Purity guarantee.
  • Bond is by RBI, held in the books of the RBI or in demat form eliminating risk of loss of scrip etc.
  • Bond is available in demat and paper form.
  • Can be buy from BSE, NSE, Post office or bank.
  • The tenor of the bond is for a minimum of 8 years with option to exit in 5th, 6th and 7th years.
  • The bonds will carry sovereign guarantee both on the capital invested and the interest.
  • No STT(Securities Transaction Tax).
  • Capital Gains Tax (as per Government of India guidelines).
  • RBI will announce the price before the issue date which will be fixed on the previous week's simple average of closing price of gold of 999 purity (24 carat) published by IBJA.
  • Traded on Exchange, older version of bonds are available on exchange for trade.

What is the advantage of Sovereign Gold Bond over Physical gold and Gold ETF?

Comparison of Physical gold, Gold ETF and Sovereign Gold Bond
Points Physical Gold Gold ETF Sovereign Gold Bond
Returns Lower than actual return on gold Lower than actual return on gold Higher than actual return on gold
Safety Risk of handling physical gold High High
Purity of Gold Purity of Gold always remains a question High as it is in Electronic Form High as it is in Electronic Form
Capital Gain Long term capital gain applicable after 3 years Long term capital gain applicable after 3 years Long term capital gain applicable after 3 years. ( No Capital gain tax if held till maturity )
Collateral against Loan Yes No Yes
Tradability / Exit Route Conditional Tradable on Exchange Tradable on Exchange. Redemption- 5th year onwards with GoI
Storage Cost High Very Low Very Low

How can investor buy Sovereign Gold Bonds?

Investors can buy/apply for the bond through SEBI authorized trading members and financial advisors of NSE, BSE and other channels specified by RBI like scheduled commercial banks and designated post offices. NBFCs, National Saving Certificate (NSC) agents and others can act as agents. They would be authorized to collect the application form and submit in banks and post offices. Application forms will be provided by trading members, authorized agents and can also be downloaded from RBI's website.

Who is issuing the bonds?

The Bonds are issued by the Reserve Bank of India on behalf of the Government of India. The bonds are distributed through banks and designated post offices, NSE and BSE. This should make subscribing to the bonds an easy affair. During redemption, "the price of gold may be taken from the reference rate, as decided, and the Rupee equivalent amount may be converted at the RBI Reference rate on issue and redemption".

Are there any risks in investing in Sovereign Gold Bonds?

Yes, there may be a risk of capital loss if the market price of gold declines. However, the investor does not lose in terms of the units of gold which he has paid for. Investor are going to get 2.75% interest PA on investment, which is apart from golf price movement.

Who is eligible to invest in the SGBs?

Persons resident in India as defined under Foreign Exchange Management Act, 1999 are eligible to invest in SGB. Eligible investors include individuals, HUFs, trusts, universities, charitable institutions, etc.

Can I buy SGB for Minor? Can i invest SGB on name of my minor son/daughter?

Yes. Bond can be buy on the name of minor, the application on behalf of the minor has to be made by his / her guardian.

What is the minimum and maximum limit for investment?

Min 1 gram and max 500 grams per person per fiscal year (April - March).

If I apply, am I assured of allotment?

Yes, 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.

Can I apply online?

Yes. A customer can apply online through the website of the listed scheduled commercial banks,NSE,BSE.

What are the procedures involved during redemption?

The investor will be advised one month before maturity regarding the ensuing maturity of the bond. On the date of maturity, the maturity proceeds will be credited to the bank account as per the details on record. In case there are changes in any details, such as, account number, email ids, then the investor must intimate the bank/PO promptly.

Can I use these securities as collateral for loans?

Yes, these securities are eligible to be used as collateral for loans from banks, financial Institutions and Non-Banking Financial Companies (NBFC). The Loan to Value ratio will be same as applicable to ordinary gold loan mandated by the RBI from time to time.

What are the payment options for investing in the Sovereign Gold Bonds?

Payment can be made through cash/cheques/demand draft/electronic fund transfer.

Can I get the bonds in demat form?

The bonds can be held in demat account.

Can I trade these bonds?

The bonds are tradable on stock exchanges from the date to be notified by RBI. The bonds can also be sold and transferred as per provisions of Government Securities Act.

Can I get part repayment of these bonds at the time of exercising put option?

Yes, part holdings can be redeemed in multiples of one gm.


Are you a day trader?

Enquire Trading Account:

Are you a day trader?

User Comments


ProStocks, The Flat Rate Discount Stock Broker

Fix Price - Rs 15 Per Trade

Rs 899/Month,8999/Year for
Equity Cash and F&O

Rs 499/Month,4999/Year for
Currency Derivatives

Lowest Transaction Charge
Lowest Call & Trade Fee
Lowest Stamp Duty

Get FREE Trading + Demat Acct

Zerodha  Zerodha

Free Delivery trading

Flat Rs 20 Per Trade for F&O



Beginner, seasoned investor, active trader or HNI. Get customised solutions.

Rs 0 account opening fee on Online Trading and a Demat Account
(Rs 1150 waived)


angel-broking  Angel Broking

Free Equity Delivery Trades
Flat 20% discount on online transaction


Sub brokers by name

Hyderabad Rajkot Chennai Jaipur

Sub brokers by name

Indore Lucknow Nagpur Ludhiana

Sub brokers by name

Allahabad Kanpur Patna Ernakulam