HDFC Sovereign Gold Bonds

The main features of HDFC Sovereign Gold Bonds are mentioned below:

1. Issuance: RBI issues SGBs on behalf of the Indian government.
2. Tenure: The bonds come with a tenure of 8 years. You have an option to exit from the scheme in the 5th year. However, this option is available only on interest payment dates.
3. Denomination: The bonds will be available in multiples of grams.
4. Limit: For individuals and Hindu Undivided Families (HUFs), the minimum and maximum investment limit in a financial year are 1 gram and 4 kg. However, the maximum limit for trusts and other similar entities are 20 kg.

1. Joint Holders: In the case of joint holders, the investment limit for the first applicant will be 4 kg.
2. Price: The price will be based on the closing price of 99.9% pure gold. The average price for the last 3 days of the week before the subscription period is considered to determine the price. The prices published by the Indian Bullion and Jewellers Association Limited (IBJA) are considered.

In case you make the payment via a digital mode or subscribe online, a Rs.50 discount is applicable. The prices of the Sovereign Gold Bonds will also be fixed in rupees. The price is fixed at Rs.3,785 per gram in case of payments made via digital mode or online subscription. The price is Rs.3,835 per gram for others.

1. Issue Period: The issue period was between 21 October 2019 and 25 October 2019. The allotment date was 30 October 2019.
2. Payment Modes: Payments can be made in the form of electronic banking, cheque, demand draft, or cash (maximum of Rs.20,000).
3. Form of Issuance: Under the GS Act, 2006, SGBs are provided as Government of India Stocks. Investors will be provided a Holding Certificate for the bonds.
4. Demat: You can convert the bonds to the demat form.
5. Collateral: You can use the bonds to avail a loan.
   

1. Rate of Interest: The rate of interest is 2.5% per year and is fixed. The interest is based on the nominal value and is paid out every six months.
2. Know Your Customer (KYC) Documents: The KYC norms are similar to that of physical gold. The documents that must be submitted to invest in HDFC Sovereign Gold Bonds are mentioned below:
   1. Voter ID
   2. Aadhaar Card
   3. Tax Deduction and Collection Account Number (TAN)/ Permanent Account Number (PAN)
   4. Passport

1. Tax: Under the Income Tax Act, 1961, any interest earned on SGBs is taxable. However, any Capital Gains Tax that is generated on the redemption of SGBs is exempted.
2. Price of Redemption: The redemption price will be based on the average price of 99.9% pure gold over the last three days. The prices that are determined by the IBJA will be considered.
3. Sales: You can sell SBGs via recognised stock exchanges, designated post offices, Stock Holding Corporation of India Limited (SHCIL), and banks. You can sell the bonds through agents or directly.
4. Tradability: According to the RBI, you can trade bonds on stock exchanges within two weeks from the date it was issued.

Different Methods to buy Sovereign Gold Bonds

The various methods to invest in HDFC Sovereign Gold Bonds are mentioned below:

1. Trade on Mobile
2. Dedicated Dealer Desk
3. Call & Trade
4. Online Trading Platform