If you've had your eye on gold as an investment for some time, then Sovereign Gold Bonds (SGBs) can be a lucrative avenue for investing in the precious metal owing to its multiple benefits. As the forthcoming series of SGBs will be available for subscription between September 11 and 15, 2023, this offers an excellent chance to delve into SGBs and grasp the reasons for investing in them and how to do so.
SGBs – a quick snapshot
- Sovereign Gold Bonds are government-backed bonds denominated in grams of gold and are issued by the Reserve Bank of India (RBI).
- It serves as an alternative to owning physical gold.
- These bonds have a tenure of 8 years, with an option to exit after 5 years.
- You need to make a minimum investment equivalent to 1 gram of gold and the maximum limit is 4 kg for individuals.
Why you should consider investing in SGBs
- They offer a two-fold benefit. First, you can enjoy guaranteed returns of 2.5% annually, and second, there's the potential for your investment to grow with the increase in gold prices.
- What's more, any capital gains you realize after the 8-year term are entirely exempt from taxation.
- Importantly, SGBs spare you the headaches associated with physical gold, such as safekeeping and additional costs like making charges and GST.
How to invest in SGBs?
There are two modes to invest in sovereign gold bonds - online and offline.
Online mode
- For a more convenient mode of investing, you can invest online. Many banks allow online SGB investment facilities. You can visit the bank website and apply for SGBs. For instance, Axis Bank allows its customers to invest in SGBs online.
- You have to register for the online banking facility, after which you can invest in the bonds.
- If you are an existing customer, you can log into your net banking account and invest in SGBs.
- Fill out the application form online and make the deposit through digital payment modes like cards, UPI, mobile wallets, net banking, etc.
- In the case of online investment, the bond's issue price would be ₹50 per gram less than the bond’s nominal value. This helps you save more when investing online.
Offline mode
- You can invest offline through the designated banks, post offices, the Stock Holding Corporation of India Limited and the authorised stock exchanges either directly or through their agents.
- To invest, you can either download the form online or avail of it from the branches of these financial institutions. For instance, Axis Bank offers investments in SGBs through its branches.
- You have to fill out the form, attach the relevant KYC documents (like PAN and Aadhaar cards) and make the payment to invest in the bond.
- If you are investing offline, cash payments up to ₹20,000 are accepted. Besides cash, you can also invest through cheques and demand drafts.
To sum it up, SGBs provide an attractive opportunity to diversify your gold investments, offering guaranteed returns, growth potential, and tax advantages. You have the flexibility to invest offline or online at your convenience. You can seamlessly invest in SGBs through Axis Bank's internet and mobile banking platforms. Don't miss out on this golden investment opportunity – take action today for a brighter financial future!
Also Read: [ Can gold give you interest income plus capital appreciation?]
Disclaimer: This article is for information purpose only. The views expressed in this article are personal and do not necessarily constitute the views of Axis Bank Ltd. and its employees. Axis Bank Ltd. and/or the author shall not be responsible for any direct / indirect loss or liability incurred by the reader for taking any financial decisions based on the contents and information. Please consult your financial advisor before making any financial decision
