Can Sovereign Gold Bonds (SGB's) be pledged as collateral to get collateral margin at Zerodha? (2024)

FAQs

Can Sovereign Gold Bonds (SGB's) be pledged as collateral to get collateral margin at Zerodha? ›

SGBs can be pledged for collateral margin at Zerodha if they are on the list of approved securities for pledging.

Yes, you can pledge your Sovereign Gold Bonds (SGBs) and get the collateral margin.

According to RBI's FAQs on SGB, “Yes, these securities are eligible to be used as collateral for loans from banks, financial Institutions and Non-Banking Financial Companies (NBFC).

Only G-Secs can be pledged, and they are considered as cash component. T-bills and SDLs cannot be pledged. See the list of G-Secs accepted for pledging here: support.zerodha.com/category/conso…

SGB holders can avail loan on Sovereign Gold Bonds. The maximum amount that can be availed is Rs 20.00 lakhs per individual.

The cost of pledging, as well as unpledging, is ₹20 + GST per scrip For example, if you are pledging 100 shares of Reliance and 200 shares of TCS, the total cost will be (20 x 2 = 40) + GST charges.

SGBs can be pledged for collateral margin at Zerodha if they are on the list of approved securities for pledging.

When using collateral margin to trade F&O, the shareholder must have 50% of the margin requirement in cash or cash equivalents. If not, interest at 0.035% per day will be charged on the cash component funded by Zerodha.

The cost of pledging is ₹30 + GST per instrument, irrespective of the quantity pledged. There are no charges for unpledging.

How can I withdraw my pledge holdings in Zerodha? ›

The equity collateral margin represents the margin received against pledged stocks, ETFs, and mutual funds after deducting the haircut. Traders can utilize collateral margins for trading futures, selling options, and conducting intraday equity trades.

Yes, Zerodha provide margins on Liquid mutual funds. To learn more, see How to pledge mutual fund investments to get collateral margins?

After 8 years, the SGBs mature, and the interest and redemption proceeds will be credited to the bank account. You will be informed about its maturity status one month before the maturity date.

If over time, the value of the collateral falls below the agreed-upon minimum, the issuer has to put up additional securities or cash as collateral. This kind of bond is considered safer than an unsecured bond; however, the tradeoff with greater safety is a lower yield and therefore lower payout.

NABARD, Sovereign Gold Bonds, and a few other government bonds can be used as collateral to avail of a loan. How much loan is available: The loan-to-value varies depending on the lender and type of security.

Yes. The facility to create pledge, hypothecation or lien against Relief/Savings Bonds is available as in case of other Government securities as explained at Question Nos.

NASDAQ and all exchange-listed securities are allowed, as are U.S. government and municipal bonds. Over-the-counter securities are allowed if they are listed on the Federal Reserve marginable securities list. However, new issues have to be publicly traded at least 30 days before they can be purchased on margin.

Pledging shares can help investors trade in high volumes, as it allows for higher margins.