Invest in Sovereign Gold Bonds (SGB) on Espresso platforms 100% digitally!

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Invest in Sovereign Gold Bonds (SGB) on Espresso platforms 100% digitally!

May 14, 2021
Invest in Sovereign Gold Bonds (SGB) on Espresso platforms 100% digitally!

Sovereign Gold Bonds (SGB) are issued by the Reserve Bank of India (RBI) at regular intervals throughout a fiscal year and give investors a unique opportunity to diversify their portfolios with a relatively stable investment compared to Equities. What’s more, SGBs can even be used as collaterals for loans!

With Espresso, you can now invest in SGBs 100% digitally!

What’s more, for investors making online payments and whose applications are made in digital mode, they get a Rs 50 per gram discount too!

So, what are Sovereign Gold Bonds?

SGBs are Government Securities denominated in grams of gold. These are substitutes for holding physical gold. SGBs are issued by the RBI on behalf of the Government of India in tranches throughout the fiscal year. Investors have to pay the issue price in cash and the bonds are redeemed in cash on maturity.

As you might know, there are many reasons for buying gold:

  • The yellow metal acts as a hedge against inflation
  • Relatively stable investment compared to Equities
  • Good diversification strategy

You can read up on SGB FAQs on the RBI website here.

Advantages of investing in SGBs

Let’s get down to the basics and see why investing in SGBs could be a “golden” opportunity for you:

  • Sovereign Gold Bonds carry the sovereign guarantee as these are issued by the Reserve Bank of India on behalf of the Government of India.
  • These Bonds are tradeable on the Exchanges.
  • With Espresso, you can easily purchase SGBs 100% digitally and hold the Bonds in demat form. That’s not all – if you invest in SGBs via online payments and if your application is made in digital mode, you get a Rs 50 per gram discount as well!
  • Investing in SGBs eliminates the risk of theft and the cost of storage. Further, SGBs are free from issues like making charges and purity, associated with purchase of gold in jewellery form.
  • SGBs carry a fixed interest rate of 2.50% per annum on the amount of the initial investment. Interest is credited semi-annually to the bank account of the investor.
  • Investors are assured of the market value of gold at the time of maturity and periodical interest.
  • SGBs have a tenure of eight years; early encashment/redemption of the bonds is allowed after the fifth year.
  • Interest on SGBs is taxable but the Capital Gains Tax arising on redemption of the bonds is exempted for individuals.
  • SGBs can be used as collateral for loans.
  • SGB prices are linked to the price of gold of 999 purity published by India Bullion & Jewellers Association (IBJA).

Video resources – Walkthrough of how to invest in SGBs via Espresso platforms

  • For a quick guide to investing in SGBs via the Espresso app, tap here
  • For a simple, step-by-step walkthrough of investing in SGBs via the Espresso website, tap here

Not an Espresso customer?

Not an Espresso customer, but still want to subscribe for Sovereign Gold Bonds? Become an Espresso customer in just 15 mins* by tapping here and take it from there! (* T&C apply)

The nitty-gritties of SGBs

For the even more curious reader, here are further details of how SGBs work:

  • Maturity: 8 years, with exit option from the 5th year to be exercised on interest payment dates. These Bonds will be eligible for trading from the date notified by the RBI.
  • Subscription limits for individuals: A minimum of 1 gram of gold and a maximum of 4 kilograms of gold per person in a financial year (April to March). SGBs are available in units of 1 gram of gold and multiples thereof.
  • Subscription limits for trusts and other institutions: A minimum of 1 gram of gold and a maximum of 20 kilograms of gold per institution in a financial year (April to March). Available in units of 1 gram of gold and multiples thereof.
  • Taxation: The interest on SGBs shall be taxable as per the provisions of the Income Tax Act, 1961. Individuals are exempted from paying the Capital Gains Tax arising on redemption of SGBs. Indexation benefits will be provided to the Long-Term Capital Gains arising to any person on transfer of the bonds.

SGB Calendar for 2021

For the year 2021, here is the Sovereign Gold Bond Calendar until September. SGBs will be issued in six tranches in this period as per the schedule that follows:

Sr.

Tranche

Date of Subscription

Date of Issuance

1

2021-22 Series I

May 17 to 21

May 25

2

2021-22 Series II

May 24 to 28

June 1

3

2021-22 Series III

May 31 to June 4

June 8

4

2021-22 Series IV

July 12 to 16

July 20

5

2021-22 Series V

Aug 9 to 13

Aug 17

6

2021-22 Series VI

Aug 30 to Sept 3

Sept 7

7

2021-22

Series VII

Oct 25 to Oct 29

Nov 2

8

2021-22 Series VIII

Nov 29 to Dec 3

Dec 7

9

2021-22 Series IX

Jan 10 to 14, 2022

Jan 18, 2022

10

2021-22 Series X

Feb 28 to Mar 4, 2022

Mar 8, 2022

Not an Espresso customer?

Not an Espresso customer, but still want to subscribe for Sovereign Gold Bonds? Become an Espresso customer in just 15 mins* by tapping here and take it from there! (* T&C apply)

Video resources – Walkthrough of how to invest in SGBs via Espresso platforms

  • For a quick guide to investing in SGBs via the Espresso app, tap here
  • For a simple, step-by-step walkthrough of investing in SGBs via the Espresso website, tap here

R. Kalyanaraman
by R. Kalyanaraman

Chief Executive Officer

I am a sales guy at heart with utmost willingness to listen to people – customers, employees, competitors et al. Nothing gets me a bigger adrenaline rush than an interesting conversation with my customer!