Want to invest in SGBs through demat route? Here's a guide

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Also Read: Sovereign Gold Bonds: From advantages to eligibility; all you need to know In recent years, investors have been showing a growing preference for investing in SGBs as a means of allocating funds to gold compared to alternative options for investing in gold. In this article, we will explain how to use different options including demat account to invest in these bonds. Sovereign Gold Bonds (SGBs) are a unique investment avenue that combines the attributes of gold with the convenience of bonds.

These bonds are issued by the Reserve Bank of India, aiming to provide individuals with an opportunity to invest in gold without physically owning it. Launched by the government in November 2015 under the Gold Monetisation Scheme, the Sovereign Gold Bond scheme opens for subscription in tranches by the RBI in consultation with the Government of India. The RBI periodically issues these bonds through scheduled commercial banks, designated post offices, and recognised stock exchanges.

Also Read: What is the tax treatment for sovereign gold bonds? MintGenie explains Typically, SGBs have an eight-year tenor with the option to exit after the fifth year on interest payment dates. They offer a fixed rate of interest, payable semi-annually, determined by the government at the time of issuance, currently set at 2.50% per annum. SGBs are denominated in multiples of grams of gold, with a minimum denomination of 1 gram and a maximum of 4 kilograms for individuals and Hindu Undivided Families (HUFs) in a financial year.