Sovereign Gold Bond HDFC Bank & HDFC Securities | Certificate (2024)

Investment in Sovereign Gold Bonds

SGBs i.e. Sovereign Gold Bonds are government-backed securities issued by the Reserve Bank of India on behalf of the Centre to attract investors. Sovereign Gold Bonds are also called Gold Bonds.
Investing in these bonds is a better investment option than physical gold to many market experts.
There are several reasons for it. First of all, the RBI offers a fixed assured rate of interest of 2.5 percent per annum on bonds.
Secondly, TDS does not apply to the interest of bonds and indexation benefits are provided to investors on the transfer of bonds.
The bonds are also considered superior to physical gold because of their market value, maturity, and periodical interest.
Before we discuss the “How to buy the Sovereign Gold Bond through HDFC Bank? “, let us briefly touch upon the features of bonds.

Also Read Sovereign Gold Bond Calculator : Return Calculation 2021

Top Features of Gold Bond Scheme

• The bonds will be denominated in units of one gram and multiples thereof.
• In a fiscal year, an individual and HUF can invest for a minimum of 1gm and a max of 4kgs wherein for trusts and similar entities max ceiling is 20kgs.
• Investors will be paid interest on the initial investment at the rate notified by RBI for each tranche and is paid semi-annually.
• It comes with a tenor of 8 years and one can exit at the end of 5 years onwards and can be exercised on the payment dates.
• As per the RBI guidelines, granting a loan on SGBs would be subject to the decision of the bank or financing agency.

Also Read Loan against Sovereign Gold Bond | Interest Rate | Eligibility

• The redemption price will be decided on the average closing price of gold of 999 purity for the last 3 Business days from the date of redemption.
• Premature withdrawal is applicable only after the 5th year onward on the coupon payment date and is also tradeable if held in Demat form.
• The nomination facility is available as per the provisions of the Government Securities Act 2006 and Government Securities Regulations, 2007. A nomination form is available along with the Application form.
• Payment for the Bonds will be through cash payment (up to a maximum of Rs. 20,000) or demand draft or cheque or electronic banking.
• Know-your-customer (KYC) norms will be the same as that for the purchase of physical gold. KYC documents such as Voter ID, Aadhaar card/PAN, or TAN /Passport will be required.

Read More – Sovereign Gold Bond – Features

When Can I Buy Sovereign Gold Bond?

Read More – Sovereign Gold Bond through SBI

Is a Demat Account Required for Sovereign Gold Bond?

To buy SGBs, you no need to have an HDFC DEMAT account. You can buy the bonds from HDFC online banking without registering a DEMAT account. However, the HDFC DEMAT account is needed for selling these bonds, If you wish to sell these bonds before maturity.

Sovereign Gold Bond through HDFC Bank

Read More – How to Buy & Sell Sovereign Gold Bond in Zerodha?

Sovereign Gold Bond through HDFC Securities

• First, log in to https://www.hdfcsec.com/ using your login credentials.
• Now click on the “Other Product” option to invest in Sovereign Gold Bonds online.
• You can see the details such as the issue price. Enter the number of units that you want to invest in and click on ‘Next’.
• Verify your details and click on ‘Confirm and submit. However, you need to wait for the issue date to see the allotment in your account.

Read More – RBI Bonds 2021 vs Tax Saving Fixed Deposits vs Sovereign Gold Bonds

Certificate

The holding certificate for SGBs will be mailed to your registered email ID in case you have opted for a physical form else it will reflect in your HDFC Demat account on the date of issuance of bonds. You can collect the ‘Certificate of Holding’ from your nearest HDFC branch if you do not have an email ID.

Can I Sell Sovereign Gold Bonds Before Maturity?

The bonds Holder in dematerialized form can sell on the stock exchange if they need the amount before its maturity, i.e. before 5 years. However, if the Bonds are sold in the secondary market, then they will attract capital gains at the extant rates. Interest on SGBs is taxable like normal interest receipts at your applicable tax rate.
The price of the SGBs in the market will reflect the price of gold and the demand and supply of the SGBs.
The holder in physical mode has to first get it dematerialized before they can sell them on the stock exchange.

Read More – How to Buy Sovereign gold Bond from ICICI Bank or ICICI Direct?