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Best ways to invest in Sovereign Gold Bonds


    What is Sovereign Gold Bonds?

    Gold is the best hedge against inflation and one of the best ways to invest in gold is via investing in sovereign gold bonds. It is a government-issued bond that is denominated in grams of gold. It is an alternative to buying physical gold and is issued by the Reserve Bank of India on behalf of the Government of India. 

    The bond is issued in denominations of one gram of gold or multiples thereof. Like other types of bonds, it is tradable on stock exchanges and can be used as collateral for loans.

    Sovereign Gold Bonds

    Over other gold investment options, capital gains over government bonds such as sovereign gold bonds carry a tax advantage. Plus, the interest you earn would be taxable as per your tax slab. Even if inflation is not that high, it is a good idea to diversify 5% to 10% of your portfolio into gold. So, how do you invest in these beneficial sovereign gold bonds? Continue reading. 

    How to invest in Sovereign Gold Bonds?

    You can invest in sovereign gold bonds online by filling out an application form available at the website of the issuing banks, post offices, agents, Stock Holding Corporation of India Limited offices, and stock exchanges. You can also download it from the RBI’s website. 

    → Via RBI

    Click on this link, download, and fill out the form. 

    → Via the bank’s website

    ● Log in to your bank’s website, say for example, SBI’s website

    ● Once on SBI’s website, click on the eServices option and choose ‘Sovereign Gold Bond’

    ● Read out the terms and conditions of the policy and click on proceed

    ● Fill out the registration form and submit it

    ● Enter the number of bonds you’re buying

    ● Enter your nominee details

    ● Finally, click on the submit option. 

    Some banks that provide this facility are as follows:

    ● Axis Bank

    ● SBI

    ● HDFC Bank

    ● IndusInd Bank

    ● IDFC Bank

    ● Bandhan Bank

    ● ICICI Bank

    ● Kotak Mahindra Bank

    ● Karur Vysya Bank

    ● Nainital Bank

    ● Development Credit Bank

    ● Federal Bank

    ● Bank of Maharashtra

    ● Punjab National Bank

    ● Central Bank of India

    ● Indian Bank

    ● Canara Bank

    If you apply online and make the payment digitally, the issue price of the bond would be Rs 50 per gram less than the nominal value. Once you buy the bonds, they will be credited to your demat account. 

    These government bonds pay an annual interest of 2.5% every six months and charge zero capital gains on maturity. Before applying for sovereign gold bonds, make sure a series opens. SGBs mature after eight years of the purchase date, but you can redeem them within five years. 

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