Looking for a seamless way to invest money in Sovereign Gold Bonds?
Sovereign Gold Bonds (SGBs) are a scheme by the Government of India to simplify investments in gold.
SGB enables an individual to invest in the digital gold format without buying physical gold. It is a security investment where the bonds are backed by the government, so there is a very low chance of any defaults.
Investing in SGBs is just like buying physical gold.
This means until your bond matures, you’ll keep earning 2.5% of the principal amount every year. The price of your bonds will depend on the market value of gold at the time of your redemption.
A few of the benefits of investing in SGBs are:
- It is a government-backed scheme where you earn 2.5% annual interest on the principle investment price.
- The interest amount gets credited straight to your bank account like dividend funds.
- You can redeem the bonds after 5 years. The maturity period of SGBs is 8 years.
- The redemption amount gets automatically credited to your bank account.
- The value of your bonds isn’t fixed. It’s equivalent to the price of gold on the market.
- It same as buying physical gold. You can sell it in the form of a Demat listing to eligible investors.
Zerodha allows all of its users to buy Sovereign Gold Bonds without extra fees and using their same Kite account.
Investing in SGB through Zerodha is much simpler and quicker than banks and post-offices.
In this guide, I’ll show you how to buy and invest in Sovereign Gold Bond Scheme using Zerodha. Step by Step.
Let’s get started!
Step 1: Find the latest SGB series issue dates
SGBs are not available to buy throughout the year.
The government of India issues these bonds in four to six series. The investment options generally start from May and end in the first week of September.
To find the issue date for the rest of the year, visit ICICI bank’s SGB upcoming schedule page here.
On this page, under the column “Date of subscription” you’ll find the period when SGB issues are open for investors to purchase. Under the column “Date of Issuance,” you’ll find the date when the SGB units you purchased will get credited into your account.
You’ll only be able to invest in SGB during this specific period. So make sure you plan in advance how much gold you’d like to buy in a particular tranche.
Usually, the scheme period is about 5 days.
You can choose to buy SGB on any of these 5 days.
Once you pick a day, the next step is placing the purchase order.
To place an SGB purchase order, visit Zerodha’s Gold Bond page. Click on the invest now button to go to the Coin by Zerodha page.
Alternatively, you can also log in to your Coin by Zerodha dashboard and click on ETFs and SGBs. This page also allows you to invest in Gold ETFs along with the Sovereign Gold Bond scheme. Don’t worry, every user with a Zerodha account can access its Coin app too.
Click here to log in to your Coin app dashboard. This link will take you straight to the SGB page upon successful login.
On the Coin page, you’ll see the Sovereign Gold Bond investment option available. If you visit this page anytime other than the SBG scheme offering dates, you won’t find this option.
Under the “Sovereign Gold Bond” section, fill in the desired quantity of SGB you’d like to purchase.
For this tutorial, I’m buying 3 grams worth of Sovereign Gold Bond. You can see the offer close date on this page as well. Make sure you have a sufficient balance in your Zerodha equity account until the offer closes.
You can only enter the quantity to invest in grams. It doesn’t allow you to invest a certain amount as the rate of gold per gram for SGB is fixed by the government of India.
After you’ve entered the quantity, click on the place order button.
A confirmation popup will appear for you to verify the investment details. Read the confirmation message, carefully, verify the purchase units and click on the place order button once again.
Your order has been successfully placed.
The order status will change to pending once the order is placed.
If you need to make any edits to the quantity of your order, here’s how you can do it:
Go to your Coin by Zerodha dashboard and click on ETFs and SGB from your account menu.
The same page where you placed the order will open.
Click on the Pencil icon to edit your SGB order. If you wish to cancel your order, click on the Bin icon.
The SGB units will be allocated to your Zerodha Demat account within 10- 15 working days after the closure of the issue period.
Here’s how it will look once it is credited to your Demat account:
Investing in SGB is a smart choice. On top of earning the future appreciated value of Gold, you also get paid 2.5% interest annually. It doesn’t get any better than that for a conservative investor.
I hope this Zerodha SGB tutorial helped you.
If you’ve any questions, comment them below.