For decades, people have been making investments in order to maximize their savings and capital. One of the most popular form of investing is gold. As an alternative to investing in gold, Vijaya Bank, one of the leading banking organization’s of India, offers the facility to invest in a special scheme known as Sovereign Gold Bonds or SGBs, which are essentially government securities that are designated in grams of gold. Introduced by the Reserve Bank of India, on behalf of the government of India, Sovereign gold Bonds are basically a substitute for investing in gold. The process of obtaining a SGB is quite simple. An investor is required to pay the price of issue in cash and upon maturity, the bonds will be repaid in cash. Returns that investors get are linked to the price of gold. All in all, the primary purpose of the scheme is to offer the customers investing benefits which are similar to those which come from investing in gold. One of the greatest advantages of investing in SGBs is that they serve as a collateral while taking a loan or can also be traded / sold at the stock exchange.
Features & Benefits of the Sovereign Gold Bond Scheme
The Vijaya Bank Sovereign Gold Scheme offers a host of valuable benefits and features for capital growth. Here are some of them:
- You may avail these Sovereign Gold Bonds in demat or paper form, as per your need.
- The minimum tenure for which this bond can be taken is fixed at 8 years. However, investors do have the option of exiting in the 5th, 6th and 7th year of the bond scheme.
- The minimum amount of investment required in the Sovereign Gold Bond Scheme is fixed at two grams (2g). The maximum buying limit for this investment is fixed at 500 grams per person, per fiscal year i.e. April to March. (SGBs are issued in denominations of 1 gram of gold and multiples of the same).
- One of the primary advantage of a Sovereign Gold Bond is that it can serve as a valid collateral for a loan.
- If an investor wishes to make an early exit from their bond scheme, they may do so by trading their bonds on the stock exchange as well.
- For greater convenience, you may also apply for these bonds online.
- Investors have multiple payment options in order to invest in SGBs. You may choose from paying in cash, by cheque, Demand Draft, or via electronic fund transfer channels.
- For an investor in Sovereign Gold Bonds, the tax treatment on capital gains will be similar to that applicable on physical gold.
How Can I Buy Sovereign Gold Bonds
Sovereign Gold Bonds can be purchased by Indian residents or bodies. These bonds are issued by the RBI on behalf of the Government of India on the payment of rupees. The denomination of the bonds shall be done in grams of gold. Investors must invest in a minimum of 2 grams and up to a maximum limit of 500 grams.
Where Can I Buy Sovereign Gold Bonds.
If you wish to invest in Sovereign Gold Bonds, you can apply for and obtain the same through selected post offices and scheduled commercial banks. Non-banking Financial Companies (NBFCs) and National Saving Certificate (NSC) agents are among the other channels through which you may also apply for these bonds. These bodies / representatives are authorized to aid in the collection and submission of SGB application forms in post offices and banks.
You may apply to obtain Sovereign Gold Bonds if you are an Indian resident (as defined under Foreign Exchange Management Act, 1999). Individuals, universities, Hindu Undivided Families (HUFs), Charitable Institutions, Trusts are among the eligible bodies who can apply for a Sovereign Gold Bond Scheme. Additionally, minors who are interested to invest in this scheme may also do so. In order to do so, the minor’s guardian must submit an application on their behalf for the purpose.
Can I be assured of an SGB allotment if I apply?
Allotment of SGBs is dependent on the investor meeting the eligibility criteria, furnishing of the necessary identification documents and remittance of the application money in due time.
I wish to redeem my Gold Bond. How will I receive the redemption amount?
All proceeds of the SGB redemption will be credited to the investor’s bank account, which they have provided at the time of purchasing the bond.
Can I transfer my bond to another investor or gift them to someone?
Yes, you may transfer the bond to another eligible investor. If you wish to gift a Sovereign Gold Bond to a family member or friend, you can do so. However, transfer of the bond can only be done if the person meets the eligibility criteria.
Is joint-holding allowed on a Sovereign Gold Bond?
Yes, a Sovereign gold Bond can be held jointly.
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