SGB FAQs

SGB stands for Sovereign Gold Bond 2017-18 - Series-III and shall be issued by the Reserve Bank India on behalf of the Government of India.

Yes, The Bonds will be restricted for sale to resident Indian entities including individuals, HUFs, Trusts, Universities and Charitable Institutions. Online purchase is available for resident Indian individuals

The tenor of the Bond will be for a period of 8 years with exit option from 5th year to be exercised on the interest payment dates.

Yes, the Minimum permissible investment will be 1 gram of gold and the Maximum limit of subscribed shall be 4 KG for individual, 4 Kg for HUF and 20 Kg for trusts and similar entities per fiscal (April-March) notified by the Government from time to time. A self-declaration to this effect will be obtained. The annual ceiling will include bonds subscribed under different tranches during initial issuance by Government and those purchased from the Secondary Market. In case of joint holding, the investment limit of 4 KG will be applied to the first applicant only.

Price of Bond will be fixed in Indian Rupees on the basis of simple average of closing price of gold of 999 purity published by the India Bullion and Jewellers Association Limited for the last 3 business days of the week preceding the subscription period. The issue price of the Gold Bonds will be Rs. 50 per gram less for those who subscribe online and pay through digital mode. Payment for the Bonds will be through cash payment (up-to a maximum of Rs. 20,000) or demand draft or cheque or electronic banking.

Yes, The Gold Bonds will be issued as Government of India Stocks under GS Act, 2006. The investors will be issued a Holding Certificate for the same. The Bonds are eligible for conversion into Demat form.

The redemption price will be in Indian Rupees based on simple average of closing price of gold of 999 purity of previous 3 business days published by IBJA.

Bonds will be sold through banks, Stock Holding Corporation of India Limited (SHCIL), designated post offices as may be notified and recognized stock exchanges viz., National Stock Exchange of India Limited and Bombay Stock Exchange, either directly or through agents.

The investors will be compensated at a fixed rate of 2.50 per cent per annum payable semi-annually on the nominal value.

Yes, Bonds can be used as collateral for loans. The loan-to value (LTV) ratio is to be set equal to ordinary gold loan mandated by the Reserve Bank from time to time.

Know-your-customer (KYC) norms will be the same as that for purchase of physical gold. KYC documents such as Voter ID, Aadhaar card/PAN or TAN /Passport will be required.

The interest on Gold Bonds shall be taxable as per the provision of Income Tax Act, 1961 (43 of 1961). The capital gains tax arising on redemption of SGB to an individual has been exempted. The indexation benefits will be provided to long term capital gains arising to any person on transfer of bond

Online subscription for SGB is available only to single A/c holder. Joint investment is not allowed.

To subscribe for SGB DP ID is not mandatory.

Only your DP service provider can update you.

In case of wrong details of DP ID, request for credit to Demat account will be rejected and RBI will issue the soft copy of SGB. This will be available in your branch. Later on you may request your branch for dematerialisation of SGB in your Demat account.