Sovereign Gold Bonds Growth, Trust And Security Along With Flexibility.

  • Benefits
  • Features
  • Sovereign Gold Bond 2022-23

Sovereign Gold Bonds : Features

Minimum and maximum investment:

The minimum investment that can be made in this bond is 1 gram. Each individual or HUF can hold a maximum of 4 kgs every year in such bonds. For trusts, charitable institutions, the maximum limit is 20 kgs.


Fixed interest rate:

Interest will be earned on the Sovereign Gold Bonds at the rate of 2.5% annually, paid semi-annually.


Transparency in prices:

The prices of the gold bond are transparent since they are linked to the price of gold in the market.


Exit option:

There is an exit option for investors after the 5th year of the date of issue of the Bond. Repayments will be done on the next interest payment date.


Joint holders and nominees permitted:

The sovereign gold bond offers joint holders and nominees to the investors.


Bonds traded on the stock exchange:

Bonds held in demat form will be eligible to be traded on the stock exchanges.


Mode of payment

Cash, demand draft, cheques, internet banking/bob World are acceptable modes of payment for the sovereign gold bond scheme, India. However, cash is only accepted up to Rs. 20,000.

Sovereign Gold Bonds : Sovereign Gold Bond 2022-23

Sovereign Gold Bond Scheme 2022-23 (Series-I) 20th June 2022 to 24th June, 2022.

The issue price for SGB-Series-2022-23-Series-I is Rs 5,091/- per Gram and GOI in consultation with RBI has decided to offer a discount of Rs. 50/- per gram less than the nominal value for the investors applying online. For such investors, the issue price will be Rs 5,041- per gram.

Sovereign Gold Bond Scheme 2022-23 (Series-II) 22nd August 2022 to 26th August, 2022.

The issue price for SGB-Series-2022-23-Series-II is Rs 5,197/- per Gram and GOI in consultation with RBI has decided to offer a discount of Rs. 50/- per gram less than the nominal value for the investors applying online. For such investors, the issue price will be Rs 5,147/- per gram.

Sovereign Gold Bond Scheme 2022-23 (Series-IV) 06th March 2023 to 10th March 2023.

The issue price for SGB-Series-2022-23-Series-IV is Rs 5,611/- per Gram and GOI in consultation with RBI has decided to offer a discount of Rs. 50/- per gram less than the nominal value for the investors applying online. For such investors, the issue price will be Rs 5,561- per gram.

Sovereign Gold Bond 2022-23 Series- I, II , III & IV

The schedule of Sovereign Gold Bonds 2022-23 Tranche I,I, III & IV as announced by Reserve Bank of India is specified as under, provided that the Central Government may, with prior notice, close the Scheme at any time before the period specified below.

S. No Tranche Date of Subscription Date of Issuance
1 2022-23 Series I June 20-June 24,2022 June 28, 2022
2 2022-23 Series II August 22-August 26, 2022 August 30,2022
3 2022-23 Series III December 19 - December 23, 2022 December 27, 2022
4 2022-23 Series IV March 06 - March 10, 2023 March 14, 2023

Eligibility for Investment:

The Gold Bonds under this scheme may be held by a Trust, HUFs, Charitable Institutions, University or by a person resident in India, being an individual, in his capacity as such individual, or on behalf of minor child, or jointly with any other individual.


Form of Security:

The Gold Bonds shall be issued in the form of stock certificate, as specified in Form ‘C’. The Gold Bonds shall be eligible to be converted into demat form.


Applications:

Application form from investors will be received at branches during normal banking hours on the weeks of subscription.


Date of Issue:

The date of issuance shall be as per the details given above.


Denomination:

The Bonds shall be denominated in units of one gram of gold or multiples thereof. Minimum investment in the Bonds shall be one gram with a maximum limit of subscription per fiscal year (April-March) of 4 kg for individuals, 4 kg for Hindu Undivided Family (HUF) and 20 kg for Trusts and similar entities notified by the government from time to time.


Interest:

The Bonds shall bear interest from the date of issue at the rate of 2.5 % (fixed rate) per annum on the nominal value. Interest shall be paid in half-yearly rests and the last interest shall be payable along with principal on maturity.


Redemption:

The Bonds shall be repayable on the expiration of eight years from the date of issue of the Bonds. Pre-mature redemption of the Bond is permitted after fifth year of the date of issue of the Bonds and such repayments shall be made on the next interest payment date. The redemption price shall be fixed in Indian Rupees and the redemption price shall be based on simple average of closing price of gold of 999 purity of the previous 3 working days, published by the India Bullion and Jewellers Association Limited.
RBI/depository shall inform the investor about the date of maturity of the Bond one month before its maturity.
*The loan against SGBs would be subject to decision of the lending bank/institution, and cannot be inferred as a matter of right by the SGB holder.


Tax Treatment

Interest on the Bonds shall be taxable as per the provisions of the 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.


Joint Holding and Nomination

Joint holders and nominees (of first holder) are permitted. In case of joint holding, the investment limit of 4 kgs will be applied to the first applicant only.

Nomination of and its cancellation shall be made in Form ‘D’ and Form ‘E’, respectively.

An individual non-resident Indian may get the security transferred in his name on account of his being a nominee of a deceased investor provided that:

  • the Non-Resident investor shall need to hold the security till early redemption or till maturity; and
  • The interest and maturity proceeds of the investment shall not be repatriable.

Transferability

The Bonds issued in the form of stock certificate shall be transferable by execution of an instrument of transfer as in Form ‘F’.


Tradability:

The Bonds shall be eligible for trading on date notified by the Reserve Bank of India. (It may be noted that only bonds held in demat form with depositories can be traded in stock exchanges).


Know-Your-Customer (KYC) requirements:

Every application must be accompanied by the ‘PAN details’ issued by the Income Tax Department to the investors (individuals and other entities). KYC Documents such as Voter ID, Aadhaar Card/PAN or TAN/Passport will be required.


Cancellation:

Cancellation of application permitted till the closure of the issue, i.e. until Friday of the particular week of subscription. Part cancellation of submitted request for purchase of gold bonds is not permitted.


Lien Marking:

As the bonds are government securities, lien marking etc. will be as per the extant legal provisions of Government Securities Act, 2006 and rules framed there under.

All branches of Bank of Baroda in India are authorized to issue SGB.

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Frequently Asked Questions (FAQs)

  • What is Sovereign Gold Bond (SGB)? Who is the issuer?

    A sovereign gold bond (SGB) is a government security that is denominated in gold grams. Bonds issued by GOI that hold the value of Gold denominated in grams in the form of bond.

  • Why should I buy SGB rather than physical gold? What are the benefits?

    One should buy SGB rather than physical gold because there is no risk of theft, damage or storage. The benefits are:-

    • Saves cost of locker rent
    • Earns interest @ 2.5% payable H.Y to the holder of SGB unlike physical gold
    • Can be used as a collateral for loans
    • Is freely transferred to others
    • Tradable on stock exchange
  • Are there any risks in investing in SGBs?

    No, there is no risks in investing in SGBs.

  • Who is eligible to invest in the SGBs?

    Trust, HUFs, Charitable Institutions, University or resident Indian are eligible to invest in the SGBs.

  • Will joint holding be allowed?

    Yes, joint holding will be allowed under mode of operation Anyone or Survivor, Either or Survivor.

  • Can a Minor invest in SGB?

    No, minor cannot invest in SGB. But an individual, in his capacity as such individual, or on behalf of minor child, can invest.

  • Where can investors get the application form?

    The investors can get the application form through any BoB branch or website.

  • Can an investor hold more than one investor ID for subscribing to the Sovereign Gold Bond?

    No, there should be only one Investor ID for one subscriber.

  • What is the minimum and maximum limit for investment?

    The limit for investment is:
    Minimum -1gm
    Maximum Subscription - Individual 4 kg
    HUF – 4 kg
    Trusts – 20 kg

  • Can each member of my family buy 4Kg in their own name?

    Yes, every application must be accompanied by the ‘PAN details’ issued by the Income Tax Department to the investor(s).

  • Can an investor/trust buy 4 Kg/20 Kg worth of SGB every year?

    Yes, an investor/trust can buy 4 Kg/20 Kg worth of SGB every year.

  • Is the maximum limit of 4 Kg applicable in case of joint holding?

    In case of joint holding, the limits of 4Kg shall be applicable to the first applicant only.

  • What is the rate of interest and how will the interest be paid?

    Earns interest @ 2.5% payable half yearly to the holder of SGB unlike physical gold.

  • When will the customers be issued Holding Certificate?

    After completion of settlement the customers will be issued Holding Certificate.

  • Can I apply for Sovereign Gold Bonds online?

    Yes, it is through Net Banking & Mobile Banking , SGB can be applied.

  • At what price the bonds are sold?

    The bonds are sold as per the decision by RBI.

  • How will I get the redemption amount?

    The redemption amount will get through operative SB account.

  • What are the procedures involved during redemption?

    The lock-in period of the bond is 8 years, although a customer becomes eligible for early redemption after completion of 5 years. The customer can apply for redemption only when RBI comes up with the redemption window for the specific tranche which is around the interest due date.

  • Can I encash the bond anytime I want? Is premature redemption allowed?

    The lock-in period of the bond is 8 years, although a customer becomes eligible for early redemption after completion of 5 years. The customer can apply for redemption only when RBI comes up with the redemption window for the specific tranche which is around the interest due date.

  • Can I use these securities as collateral for loans?

    Yes, one can use these securities as collateral for loans.

  • What are the tax implications on i) interest and ii) capital gain?

    Earns interest @ 2.5% payable H.Y to the holder of SGB unlike physical gold.

  • Can I trade these bonds?

    Yes, you can trade these bonds if bond is purchased or converted in DEMAT form.

  • What is the procedure to be followed in the eventuality of death of an investor?

    As per the guidelines issued by RBI, on the death of the SGB Holder, the name of the nominee will be substituted as the bond holder in place of the deceased holder and a fresh certificate will be issued under proper authentication.

  • Can I get part repayment of these bonds at the time of exercising put option?

    No, one cannot get the part repayment of these bonds at the time of exercising put option.

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