Sovereign Gold Bond: SGBs provide a secure and convenient method for investing in gold, offering several benefits such as safety, interest income, capital appreciation, tax advantages, and liquidity. They are particularly suitable for long-term investors aiming for stability and protection against underperforming assets
SGB vs physical gold
Both households as well as institutional investors are increasingly attracted to SGBs owing to the plethora of benefits that come along with lucrative returns.
“Investing in Sovereign Gold Bonds is better than holding physical gold as it offers a blend of security, convenience, and financial potential. With the backing of the RBI, SGBs provide a shield against default risks, while their digital form eliminates storage concerns associated with physical gold. Embracing the future of gold investment with Sovereign Gold Bonds, it offers stability and security with convenience,” said Puneet Maheshwari, Director, Upstox.
“As the Indian economy resiliently navigates through choppy waters, investments in SGB tranche is one of the safest harbors for the investors which they can hedge against the headwinds. With India traditionally inclined towards gold for domestic investments, we foresee the behavioral shift in buyers towards SGBs for investment-driven purposes, thus positioning physical gold as a lifestyle statement for adornment purposes,” said Colin Shah, MD, Kama Jewelry.
Historically, investors have always looked to Gold for consistent and strong returns. "If we look at 2023 alone, despite geopolitical tension, a weaker dollar, and being volatile, Gold is currently traded close to its lifetime high price of 62,240/-, offering approximately 11.95% return in 2024 already. If we look at the long-term, its price has more than doubled in the last 10 years. The SGb (Sovereign Gold Bonds) scheme is an ideal investment opportunity for investors willing to hold on to their investments to seek capital appreciation in the long run,” said Nish Bhatt, Founder & CEO, Millwood Kane International.
Various investment platforms offering options to invest in SGB
Investing in Sovereign Gold Bonds is easily accessible through designated banks such as SBI and HDFC Bank. Interested individuals can apply for these bonds via the respective bank's website under the 'Investment' tab.
Furthermore, several platforms like Upstox, Zerodha Kite, Groww, and others offer investors the opportunity to invest in Sovereign Gold Bonds.
How to buy gold bonds online in India
-Log in to your net banking account.
-Navigate to the 'eServices' section and locate the 'Sovereign Gold Bond' option.
-Review the terms and conditions carefully, then click on 'Proceed'.
-Complete the registration form with the required information and click 'Submit'.
-In the purchase form, specify the quantity of subscription along with the nominee's details.
-Once all details are entered, click on 'Submit' to finalize your investment.
SGB Tranche 2023-24 Series IV opened for subscription on February 12. The five-day window will close on February 16.
Disclaimer: The views and recommendations made above are those of individual analysts, and not of Mint. We advise investors to check with certified experts before taking any investment decisions.
First Published:
15 Feb 2024, 01:21 PM IST
FAQs
You can purchase SGBs directly from the 'RBI Retail Direct' website. The Stock Holding Corporation of India Limited (SHCIL) allows you to invest in SGBs. You can also buy SGBs from any recognised stock exchange, i.e. the National Stock Exchange of India and Bombay Stock Exchange.
How to invest in SGB gold bond? ›
Can I apply online? Yes. A customer can apply online through the website of the listed scheduled commercial banks. The issue price of the Gold Bonds will be ₹ 50 per gram less than the nominal value to those investors applying online and the payment against the application is made through digital mode.
Is SGB going to be discontinued? ›
The Narendra government is likely to discontinue the Sovereign Gold Bond (SGB) scheme, with a final decision expected in September, sources privy to the developments told CNBC-TV18. The decision on the scheme's fate is expected to align with the Reserve Bank of India's borrowing meeting scheduled for September 2024.
What is the alternative to SGB? ›
Gold Exchange Traded Funds (ETFs) as an investment tool
Another alternative method to invest in paper gold is Gold ETFs or exchange-traded funds. These are kinds of mutual funds that are listed and traded on exchanges viz. BSC and NSC are just like shares.
How to buy a sovereign gold bond in the USA? ›
Investing in U.S. sovereign bonds is a straightforward process and can be done on the U.S. Treasury Department site, TreasuryDirect.gov. Buying foreign bonds is a bit trickier and is usually done via a broker through an account set up for foreign trading. The broker would buy the bond at the prevailing market price.
How to buy gold bars in the USA? ›
One common way to purchase gold bars is through licensed retailers online. Prospective buyers can browse gold bar products on reputable retail websites such as the American Precious Metals Exchange (APMEX), JM Bullion, and Wholesale Coins Direct.
Is SGB better than FD? ›
Conclusion. SGBs and FDs both provide customers with low-risk alternative investments but operate differently. FDs offer lower returns as compared to SGBs but have the benefit of stability. If you are looking for fixed returns with higher LTV ratios, FDs are your best bet.
Can NRI invest in SGB? ›
As an NRI, you are not allowed to make any new investments in Sovereign Gold Bonds (SGBs) as per the Reserve Bank of India (RBI) and the prevailing FEMA guidelines. However, as a resident Indian, if you had invested in SGBs in the past, you are permitted to hold them up to their maturity or opt for an early redemption.
When to buy SGB in 2024? ›
Sovereign Gold Bond 2023-24 Series IV
| Subscription Period | Date of Issuance | Investment Limit |
|---|
| 12 February 2024 - 16 February 2024 | 21 February 2024 | 1 gm to 4 kg |
Jul 31, 2024
Capital Loss
Your investment in SGB can result in a capital loss as the bond value is directly linked to the price of gold in the international markets. If the price at which you buy the bond is higher than the price at which you redeem it at maturity, you might end up in a loss.
SGBs are issued with a maturity period of 8 years. Investors are allowed early redemption/encashment after 5 years. Alternatively, they can sell the bonds on the secondary market if they are listed from the date specified by the RBI.
Can I buy SGB anytime? ›
Yes. An individual can buy 4Kg worth of gold every year as the ceiling has been fixed on a fiscal year (April-March) basis.
What are the disadvantages of SGB? ›
The Demerits of Sovereign Gold Bonds
- If the price of gold falls, then investors face some capital loss.
- As Sovereign Gold Bond investment comes with a stipulated lock-in period, this investment potentially lacks liquidity.
- While the interest income generated by SGBs is taxable, the redemption amount on maturity is not.
The decision between gold ETFs and SGBs hinges on your specific investment objectives and risk tolerance: For liquidity and flexibility: Opt for gold ETFs if you seek effortless buying and selling of your investment, potentially capitalizing on short-term price fluctuations.
What is the best way to buy SGB? ›
1)Investors can also buy gold bonds from commercial banks, 2)You can invest in SGB Online through net banking. 3) Through the mobile application of your bank. 4) By visiting a bank branch or designated post office physically.
Which series of SGB is best? ›
So, this SGB (Series IV) 2023-24 is the highest issue price offered till date. The series prices for the financial year 2023-24 are given below. The series prices for the financial year 2022-23 are given below. The series prices for the financial year 2021-22 are given below.
Where can I buy SGB tokens? ›
SGB tokens can be traded on centralized crypto exchanges. The most popular exchange to buy and trade Songbird is Bitstamp, where the most active trading pair SGB/EUR has a trading volume of $5,038.65 in the last 24 hours. Other popular options include Kraken and Gate.io.
Is it better to buy SGB in secondary market? ›
If you purchase SGB in the primary issue, you get 2.5 percent interest paid semi-annually on the face value. But how much interest is received when you buy SGB from the secondary market? You will still get 2.5 percent interest if you buy SGBs from the exchange.
What is the best gold bar to buy for investment? ›
What are the best gold bar brands to buy as an investor? Investors should always look towards the most respected, internationally recognized manufacturers when buying gold bars. We recommend PAMP Suisse, The Perth Mint, Valcambi Suisse, The Royal Canadian Mint, and Credit Suisse gold bars.
