BackDid you know? You can use the BSE Star MF platform to buy gold bonds
Select how many grams worth of bonds you want to buy (minimum is 1 gm) and place the order
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The 5th tranche of Sovereign Gold Bonds are open for subscription till 9 September 2016. For investors, another new distribution platform has opened up as you can buy these bonds through the BSE Star MF platform. Here’s how.
Who can access BSE Star MF?
This is an online platform meant for mutual fund (MF) distributors who are independent financial advisers (IFAs) or hold Amfi (Association of Mutual Funds of India) registration numbers, to carry out MF transactions for their customers. Once an IFA is registered, she can use the BSE Star MF platform to buy and sell MFs for her clients directly with fund houses. The platform has links with the two large depositories, Central Depository Services Ltd (CDSL) and National Securities Depository Ltd (NSDL) for demat holdings of securities transacted through this platform.
Individual investors can access this platform through a registered adviser.
Gold bonds on BSE Star MF
This facility now adds another new distribution channel for gold bonds. If your distributor already uses BSE Star MF for your transactions, the process is simple. It is likely that you are already a verified customer on the platform; you just have to enter a buy order. If you aren’t on the platform, you can go through a registered adviser to buy gold bonds via this channel. For a seamless purchase, you need a demat account that can be verified immediately with CDSL or NSDL. Any customer with a valid demat account is considered to be know-your-customer (KYC) compliant and hence, no further verification is needed.
Once you are using BSE Star MF, there is a separate space for gold bonds. Select how many grams worth of bonds you want to buy (minimum is 1 gm) and place the order. The adviser is not allowed to make a payment on your behalf. Instead, you will receive a payment link on your registered email ID, where you can choose the mode of payment. For example, if you already transact through this platform, your existing payment mandate for, say, systematic investments into MFs can be used to buy gold bonds as well.
This platform is meant for applying to the primary issue of gold bonds; you can’t trade through BSE Star MF.
The facility comes to investors at no additional cost. There is a distribution commission paid, but that has no bearing on the investor. The facility has started with the latest, 5th tranche of gold bonds, the issue price for which (per gram) is 3,150.
Benefits of gold bonds
This securitised or paper form of buying gold lets you invest in the metal without having to hold it in the physical form. Second, you earn 2.75% per annum on these bonds. The bonds come with a maturity of 8 years, with exit available after 5 years. If you wish to sell sooner, secondary market exit is available once the bonds get listed.
—Lisa Pallavi Barbora
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