The Central Government has launched ‘Sovereign Gold Bonds Scheme‘ as an alternative to purchasing physical gold. The application forms for subscribing to seventh tranche of Sovereign Gold Bonds issue are available from 27th February, 2017 to 3rd March, 2017. The bonds will be issued on 17th March, 2017.
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.
Important instructions
- 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“.
This post was last modified on July 10, 2023 9:27 pm
Sreekanth ReddySreekanth is the Man behind ReLakhs.com. He is an Independent Certified Financial Planner (CFP), engaged in blogging & property consultancy for the last 14 years through his firm ReLakhs Financial Services . He is not associated with any Financial product / service provider. The main aim of his blog is to "help investors take informed financial decisions." "Please note that the views given in this Blog/Comments Section/Forum are clarifications meant for reference and guidance of the readers to explore further on the topics/queries raised and take informed decisions. The information provided, therefore, should not be viewed as financial, legal, accounting, tax or investment advice."
View Comments
Dear Sreekanth Reddy,
Are you aware of the procedure for getting the Bonds in Demat once issued. HDFC Sec did not have any tick the box for selecting Demant. Further the Bank is not aware of the process for getting the bonds in certificate mode converted to demat.
I have purchased some Soveriegn gold bonds in the February 2016 issue. Even though I recieved mail confirming allotment along with bond numbers., my Dmat account is yet to be credited. Has any one who purchased the bond got demat credit?
Hi G K Kumar,
Same here. Even I had applied Soveriegn gold bonds in the February 2016, allotment email received but the bond still did not get credited to demat account. My bank people (SBI) have no idea about this.
Did you receive SGB bonds in your demat account?
Thanks,
Sagar
Dear Devendra,
The bonds can be held in demat account by making a specific request for the same at the time of application.Till the process of dematerialization is completed, the bonds will be held in RBI’s books.
The facility for conversion to demat will also be available subsequent to allotment of the bond. You need to get it done through your banker.As of now, I am also not aware of the exact conversion process.
Hi! Srikanth. I invested in gold bond Scheme on 22/01/2016. I also mentioned my mobile no. as well as e-mail id in my appreciation. Others who also applied for the same got both sms as well as mail intimating allotment of gold bond as applied for. But I have not received any such communication so far. Please let me know to whom I should approach to enquire about the position.
Dear Mr Rao..You can contact your banker or Point of Service (POS).
Hi,
I have applied for Sovereign Gold Bond through HDFC Netbanking.I have also got the acknowledgement and netbanking reference number.Till now,I have paid nothing.I just want to know when will I need to pay to buy this actually or it will be automatically deducted from my account.Also,when I will get this bond issued.
Dear Jazz,
I believe that amount will be auto-deducted from your bank account. The Gold bonds will be issued on 8th February, 2016.
Dear Sreekant,
i had purchased gold bond via HDFC netbanking yesterday and also received an acknowledgement copy along with application number, but now for personal reason i intend to cancel the application, please suggest the process for the same.
Already visited the HDFC branch and they suggested to get in touch with Customer Care as they do not have process of cancellation in place for this request, however spoke to customer care as well but they also do not have any idea about cancellation process for this and again suggested to visit the bank.
Kindly suggest the cancellation process of this application or how to go about it.
Thanks
Poman
Dear Poman..Even I do not have any information regarding the cancellation process. You may have to follow up with your banker only.
Did you issue cheque? Is it processed?
I applied for Sovereign gold bonds of 5 Grams on 9th Nov 2015 through hdfc securities. but till now its not credited into my demat account. Please tell me what is reason for it. The Hdfc sec people are saying that the bonds are not allotted to any one till now. is it true.
Dear Shankaraiah,
While submitting the application form, did you select 'demat form' as the mode of holding?
I believe that the bonds (first issue) have been already issued.
I also applied for Sovereign Gold Bonds in November, 2015 through SBICAPSEC online purchase mode. The transaction has been executed and amount has been debited to my account. I have also received confirmation of allotment by e-mail with mail copy of the certificate.
But till date, the bonds have not been credited to my SBICAPSEC account. Can you please guide me in this regard as to what I should do?
Dear Vasantha..Kindly follow it up with your banker or service provider (SBI cap)
Dear All,
Did anyone get the bonds deposited in their DEMAT account? For me as well they are not deposited though issued in Feb 2016. This case is Kotak Mahindra bank.
Regards,
Shalini
Hello Sreekanth... I placed the order online using HDFC Securities online demat account in IPO section. In satus its showing as "Executed". But HDFC people r saying that the bonds are not alloted.
Dear Shankaraiah..Kindly follow it up with your banker.
Dear Shankaraiah G,
Did you get the bonds credited to your DEMAT account?
I am having same issue. The amount is deducted from bank but the bonds are not in my DEMAT account yet.
Shalini
Hello Sreekanth,
Can I invest in Sovereign Gold Bonds now (in 2016) or is it closed?
Unfortunately I missed the opportunity to invest in 2015.
According to this RBI FAQ, people can invest in this scheme every year for a max of 500gm. I do not see application for this scheme available anywhere as of today.
Can you kindly guide me regarding this.
Thanks,
Ganesh
Dear Ganesh,
The first gold bond public issue was open for subscription in November. Govt may announce the dates of next issue soon. But as of now, no information about the next issue date.
Hi sir,
I have already applied for 15 grams of gold bond through a public service bank.
Expecting high value for these bonds/gold after 8 years of maturity.
Can you guide me how to invest in securities/bonds/Mutual funds..
i don't know what all of these terms mean at the first place.
But all i know is i can afford 5k for months for any kind of investment which yields good returns in the long run(even though returns are less i don't mind but i don't want to put myself in debt/loss situation)..
Where do i start with???????????????
Dear Rajesh,
If you have long-term goals, investing in equity oriented mutual funds can be very fruitful.
Kindly read below articles and you may revert to me if you need more details or guidance;
My MF Picks
Best Equity funds
Best Balanced FundsBest ELSS Funds
How to invest in Direct Mutual Fund plans
Hello, Srikanth
I have asked a few questions already to you and have always got amazing replies.
This time my question is reagrding these gold bonds.
Should I at age 23 invest in these bonds. I am investing in SIP already since past 6 months. If i decide to invest say something around 5-10 grams through this and with intrest of 2.75% and thinking that gold prices will b much higher 5 years down the line, should i indeed put money in this?
Dear varun,
Considering your age, it is prudent to invest the additional amount in your existing Equity oriented mutual funds.
Hi
Do you see any pros / cons. Given the volatality of the market and other economic conditions it may be difficukt to understand if thegold price will be in upward trend in 5+ years. I was thinkingto put a considerable amount into the bonds please let me know your views.
Thanks
Dear Harish,
Investing in Gold is much riskier than investing in Equity related options. Also, over a long term, it may not beat inflation.
You may review your decision to invest heavily in these bonds again.
But,if you HAVE to invest in gold because of some goals (kid marriage etc) you may invest a small portion of your surplus money in these bonds. These bonds can be a better option than buying jewelry. Do note that they carry 5 year lock-in period.
Thanks Sri. I agree on the perspective.