2 min read.Updated: 20 Apr 2020, 04:55 PM ISTRenu Yadav
An individual can buy a minimum of one unit and hold up to 4,000 units in a financial year
Experts recommend investing in gold bonds through demat account
NEW DELHI: The first issue of sovereign gold bonds (SGB) for FY21 opened for subscription on Monday, priced at ₹4,639 per unit. One unit is equal to one gram of gold.
An individual can buy a minimum of one unit and hold up to 4,000 units in a financial year. The price of the SGB is decided by the Reserve Bank of India (RBI) based on the average closing price of gold of the last three business days of a week preceding the subscription period. The price of gold of 999 purity published by Indian Bullion and Jewelers Association (IBJA) is taken as the basis for calculating prices.
For the current issue, the average closing price of 15-17 April was taken. The government is offering a discount of ₹50 per unit for those buying online. So, if you buy it online you will get it for ₹4,589.
Many could be planning to invest in these bonds. One can invest in SGBs through commercial banks, designated post offices, Stock Holding Corporation of India and through brokers' demat accounts. Given the lockdown, investing online will be better.
Let's look at the step-by-step process of investing in SGBs online:
There is a list of designated commercial banks through which one can invest in these bonds. You can check the list here (https://bit.ly/2VFHnEA) to see if your bank is on the list.
You can invest online if you are using the internet banking facility of the bank.
Let's understand the step by step process for a State Bank of India customer.
Step 1: Login to your net banking account
Step 2: Go to the E-services tab which lists various services offered by the bank including SGBs.
Step 3: After you click on the SGB tab it will take you to the registration page where it will show you the prefilled details such as name, address, PAN etc. You need to confirm this and your registration process will be completed.
Step 4: You can proceed to purchase. Here you will also be asked to give your nomination details, however it is optional.
Step 5: On the next page it will show you the current price of one unit of SGB. After you feed the number of units required and click submit, it will take you to the payment page. After making the payment, you will get your units. You can check the units under the enquiry section.
If you have a demat account you can login to your account and buy the bonds after filling in an online form. After making the payment online, the units will be credited your demat account. If you don’t have a demat account, you will have to open after completing the requisite Know Your Customer (KYC) formalities. If you have a demat account, you can also invest through Stock Holding Corporation of India's website.
Experts recommend investing in gold bonds through demat account.
“Investing through demat account is recommended as it is hassle-free when compared to investing in physical form plus as these bonds are listed, one can trade in these bonds or exit these bonds before maturity, hence giving the investor an exit option,’ said Chintan Kotak, director at IIFL securities
For trading in these bonds you will have to get them transferred to demat account even if you have bought them online.
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