Sovereign Gold Bonds
Issued by Government of India.
Prevailing market value of gold on maturity + 2.50 %p.a assured interest

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Issued by Government of India.
Prevailing market value of gold on maturity + 2.50 %p.a assured interest
Government of India, in consultation with the Reserve Bank of India, has decided to issue Sovereign Gold Bonds. The Sovereign Gold Bonds will be issued in six tranches from October 2020 to March 2021 as per the calendar specified below:
S.No. |
Tranche |
Date of Subscription |
Date of Issuance |
1. |
2020-21 Series VII |
October 12 - 16, 2020 |
October 20, 2020 |
2. |
2020-21 Series VIII |
November 09 - 13, 2020 |
November 18, 2020 |
3. |
2020-21 Series IX |
December 28 2020 - January 01, 2021 |
January 05, 2021 |
4. |
2020-21 Series X |
January 11-15, 2021 |
January 19, 2021 |
5. |
2020-21 Series XI |
February 01- 05, 2021 |
February 09, 2021 |
6. |
2020-21 Series XII |
March 01- 05, 2021 |
March 09, 2021 |
The Bonds will be sold through Scheduled Commercial banks (except Small Finance Banks and Payment Banks), Stock Holding Corporation of India Limited (SHCIL), designated post offices, and recognised stock exchanges viz., National Stock Exchange of India Limited and Bombay Stock Exchange Limited
The features of the Bond are:
S.No. |
Item |
Details |
1 |
Product name |
Sovereign Gold Bond 2020-21 |
2 |
Issuance |
To be issued by Reserve Bank of India on behalf of the Government of India. |
3 |
Eligibility |
The Bonds will be restricted for sale to resident individuals, HUFs, Trusts, Universities and Charitable Institutions. |
4 |
Denomination |
The Bonds will be denominated in multiples of gram(s) of gold with a basic unit of 1 gram. |
5 |
Tenor |
The tenor of the Bond will be for a period of 8 years with exit option after 5th year to be exercised on the next interest payment dates. |
6 |
Minimum size |
Minimum permissible investment will be 1 gram of gold. |
7 |
Maximum limit |
The maximum limit of subscription shall be 4 KG for individual, 4 Kg for HUF and 20 Kg for trusts and similar entities per fiscal (April-March) notified by the Government from time to time. A self-declaration to this effect will be obtained. The annual ceiling will include bonds subscribed under different tranches during initial issuance by Government and those purchased from the Secondary Market. |
8 |
Joint holder |
In case of joint holding, the investment limit of 4 KG will be applied to the first applicant only. |
9 |
Issue price |
Price of Bond will be fixed in Indian Rupees on the basis of simple average of closing price of gold of 999 purity, published by the India Bullion and Jewellers Association Limited for the last 3 working days of the week preceding the subscription period. The issue price of the Gold Bonds will be ₹ 50 per gram less for those who subscribe online and pay through digital mode. |
10 |
Payment option |
Payment for the Bonds will be through cash payment (up to a maximum of ₹ 20,000) or demand draft or cheque or electronic banking. |
11 |
Issuance form |
The Gold Bonds will be issued as Government of India Stock under GS Act, 2006. The investors will be issued a Holding Certificate for the same. The Bonds are eligible for conversion into demat form. |
12 |
Redemption price |
The redemption price will be in Indian Rupees based on simple average of closing price of gold of 999 purity, of previous 3 working days published by IBJA Ltd. |
13 |
Sales channel |
Bonds will be sold through Commercial banks, Stock Holding Corporation of India Limited (SHCIL), designated post offices (as may be notified) and recognised stock exchanges viz., National Stock Exchange of India Limited and Bombay Stock Exchange, either directly or through agents. |
14 |
Interest rate |
The investors will be compensated at a fixed rate of 2.50 percent per annum payable semi-annually on the nominal value. |
15 |
Collateral |
Bonds can be used as collateral for loans. The loan-to-value (LTV) ratio is to be set equal to ordinary gold loan mandated by the Reserve Bank from time to time. |
16 |
KYC documentation |
Know-your-customer (KYC) norms will be the same as that for purchase of physical gold. KYC documents such as Voter ID, Aadhaar card/PAN or TAN /Passport will be required. Every application must be accompanied by the ‘PAN Number’ issued by the Income Tax Department to individuals and other entities. |
17 |
Tax treatment |
The interest on Gold Bonds shall be taxable as per the provision of Income Tax Act, 1961 (43 of 1961). The capital gains tax arising on redemption of SGB to an individual has been exempted. The indexation benefits will be provided to long term capital gains arising to any person on transfer of bond. |
18 |
Tradability |
Bonds will be tradable on stock exchanges. |
19 |
SLR eligibility |
Bonds acquired by the banks through the process of invoking lien/hypothecation/pledge alone, shall be counted towards Statutory Liquidity Ratio. |
Select your preferred method.
SGBs are government securities denominated in grams of gold. They are substitutes for holding physical gold. Investors have to pay the issue price in cash and the bonds will be redeemed in cash on maturity. The Bond is issued by Reserve Bank on behalf of Government of India.
There is no restriction on the number of accounts you can open.
The quantity of gold for which the investor pays is protected, since he receives the ongoing market price at the time of redemption/ premature redemption.
There may be a risk of capital loss if the market price of gold declines. However, the investor does not lose in terms of the units of gold which he has paid for.
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