Sovereign Gold Bond from SBI
Sovereign Gold Bond offered by State Bank of India is the most profitable form of gold investment. The gold bond is issued tranches and so it is not available all year round. The first branch of gold bond was issued in November, 2015. Post offices and SBI are the main channels to sell the gold bonds as they both have the highest reach in India.
Features of Sovereign Gold Bond
The features of Sovereign Gold Bond offered by State Bank of India are as follows:
- Gold bond can be bought in the place of physical gold.
- The gold bond price is linked to the price of gold.
- The purchase price and selling price of the bond will be the prevailing market price of the gold.
- If the gold value rises, the gold bond value also rises. It is similar to that of owning gold in the form or gold coins and bullion.
- Apart from the prevailing rate of gold, you will also earn an interest which is paid half-yearly. The current rate of interest on gold bonds are set at 2.75% per annum.
- The issue price of the gold will be the gold’s market value of the previous week.
- The tenure is 8 years and premature redemption is possible after 5 years.
- This is just like any other government bond, but it has a higher appeal and a wider reach.
- The gold bond can be transferred to another person for which you will have to fill up the Form F. The transferee will have to fill the application form, nomination form and fulfil the KYC formalities.
- The bond can be sold to another person in the bond market. RBI will notify when the trading can start. In order to trade the bond, you will have to keep it in the demat form.
Benefits of Sovereign Gold Bond
The benefits of Sovereign Gold Bond offered by State Bank of India are as follows:
- Gold bond can be bought online and this makes its purchase relatively easy.
- There is no need for safekeeping as it is in a digital form and free from theft.
- You can earn interest on the gold bond, but having physical gold doesn’t offer you interest.
- This bond is 100% pure and saves you from jewellers that offer impure gold.
- Gold bond doesn’t charge any expenses.
- You can also take a loan against the gold bond.
Process to buy Sovereign Gold Bond
Gold bonds are issued at least twice a year and the government has not specified the timing yet but it may be close to Akshaya Tritiya and Diwali. The Sovereign Gold Bond can be bought from any SBI branch. To subscribe to the gold bond, -Kuber core banking system of RBI is used. The following are the steps to buy gold from SBI:
- The gold forms are available online which you can print out and fill.
- You will be required to fill 3 forms for initial subscription. Form A is the main subscription form where you will have to give your personal details and specify the subscription amount. Form B is to give the acknowledgement, the bank officer will give you this form to fill the subscription details. Form D is for nomination and it must be submitted with Form A. If you want to cancel the nomination, you have to use Form E.
- Attach your identity and address proof with the form to complete the KYC formalities.
- If you are paying through cheque, you have to cancel the cheque. You can also pay through cash, demand draft and electronic fund transfer. The cheque and demand draft must be in the name of the respective branch of State Bank of India.
- Submit all the forms along with the required documents to the branch.
- After the details have been checked, you will receive the Form B, which is the acknowledgement receipt.
- To subscribe for gold, you will have to go to the branch and the SBI official will access the e-Kuber system of RBI and will upload your data and an immediate confirmation will be provided.
- RBI will generate the holding certificates for the subscription the bank will download it and get it printed and will be sent to the investors.
- If the investor has specified for the demat account, the securities will be credited to the investors demat account on the allotment date.
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