The Central Government has launched ‘Sovereign Gold Bonds Scheme‘ as an alternative to purchasing physical gold. The application forms for subscribing to sixth trance of Sovereign Gold Bonds issue are available from 24th October, 2016 to 2nd November, 2016. The bonds will be issued on 17th November, 2016.
Sovereign Gold Bond Scheme is an indirect way of investing in Gold. Instead of buying Physical Gold, investors can invest in gold in a paper form through Sovereign Gold Bond Scheme. The under-lying asset for these bonds is Gold. These bonds will track the price of gold, plus an extra interest earning on top of that.
Bonds will be issued on behalf of the Government of India by RBI (Reserve Bank of India). These will be marketed through Post Offices / Banks / NBFCs (Non-banking Finance Companies) and by various brokers/agents (including National Saving Certificate (NSC) agents). Gold Bonds can now be purchased from NSE and BSE, besides all Bank branches and select Post Offices.
Sovereign Gold Bonds 2016-2017 : Application Form
The application forms for buying Sovereign Gold Bonds are available at banks (all schedule commercial banks) or at designated post office branches. You may click on the below image to download the application form (Form A).
- The gold bonds can be applied in joint names. In case if you are applying on behalf a minor, you have to submit an attested copy of the birth certificate (minor’s) from the School or Municipal Authorities for verification. Kindly note that nomination facility is not available in case the investment is on behalf of a minor. Also mention the application status as Resident Individual or HUF or Trust etc.,
- You have to provide the investment details. The minimum permissible investment will be 1 unit (i.e. 1 gram of gold) and the maximum buying limit is 500 gms per person per fiscal year.
- The issue price for sixth Tranche Gold Bonds (Oct to Nov 2016) has been fixed at Rs 3,007 per gram. However, the Govt has decided to issue the Gold bonds at a discounted price of Rs 2,957 per gram (a discount of Rs 50). You also have to provide the mode of payment (cash / cheque / electronic transfer. cash payment upto a maximum of Rs. 20,000).
- If you wish to hold the Sovereign Gold Bonds in ‘Demat‘ form, you have to provide your ‘depository participant’ details. Even if you subscribe to physical bonds, you can still convert them into demat form in future.
- If you wish to receive the interest payments & maturity payment (redemption payment) through electronic mode (direct credit to your bank account), you can provide your bank account details.
- In case the application is submitted by a Power of Attorney (POA) holder, please submit original POA for verification, along with an attested copy.
- Please note that nomination facility (maximum two nominees) is available to a Sole Holder or all the joint holders (investors) of an SGB. The nomination will be registered at the Office of Issue and a Certificate of Registration will be issued to the holder. The existing nomination can be cancelled or altered by a request to the Office of Issue.
- In case nominee is a minor, please indicate the date of birth of the minor and a guardian can be appointed. Nomination facility is not available in case the investment is on behalf of minor.
- In case of change of bank account, you can notify the change and get the details updated.
- You have to submit KYC documents along with the application form.
- The interest on the bond is paid half-yearly. The payment of Interest amounts will be done through the bank A/c provided in the Application form (or) to your bank A/c that is linked to the Dmat, as the case may be. Post maturity date, interest amount is not payable on gold bonds.
- The designated banks may soon provide online application facility too.
You may also like reading my article – “Sovereign Gold Bonds Scheme – Features, FAQs & Review“.