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 Sovereign Gold Bonds

Sovereign Gold Bonds

A sovereign gold bond is a government security that is denominated in gold grams. It is a substitute for physical gold. Investors invest in these bonds when the scheme opens and it is redeemed on maturity. The Reserve Bank of India on behalf of the Government of India manages the sovereign gold bond scheme.

Bank of Baroda offers customers the opportunity to invest in the sovereign gold bond scheme through all of its branches in the country.

Sovereign Gold Bond 2021-22, Series I, II, III, IV, V & VI

The schedule of Sovereign Gold Bonds 2021-22 Tranche I-VI 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

2021-22 Series I

May 17–21, 2021

May 25, 2021


2021-22 Series II

May 24–28, 2021

June 01, 2021


2021-22 Series III

May 31-June 04, 2021

June 08, 2021


2021-22 Series IV

July 12- 16, 2021

July 20, 2021


2021-22 Series V

August 09-13, 2021

August 17, 2021


2021-22 Series VI

August 30- September 03, 2021

September 07, 2021

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.


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.


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


The Bonds shall bear interest from the date of issue at the rate of 2.5 percent (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.


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 Jewelers 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

Multiple 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.


The Bonds issued in the form of Stock Certificate shall be transferable by execution of an Instrument of transfer as in Form ‘F’.


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 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.

Sovereign Gold Bonds Series-2021-22

The issue price for SGB-Series-2021-22-Series-III is Rs 4,889/- 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 4,839- per gram.

Sovereign gold bond benefits:

Form of the Gold Bonds

The gold that is denominated for the bond can be held in form of Stock certificate or may be held in demat form. There is no need to worry about storage and the hassles involved in dealing with physical gold.

No capital gains tax on redemption

Even though the interest earned on a sovereign gold bond is taxable, the long term capital gains on redemption are exempted from tax. This means that all gains made on the bond will be tax free.

Discount for online investors

The Government of India has made a provision that online investors will get a discount of Rs. 50 on the price of the bond. For investors applying online and paying online, they can avail this offer to reduce their investment price.

Collateral for loans

The sovereign gold bonds can be used as collateral for loans. The lien on the Bonds shall be marked in the depository by the lending Bank. The Loan against SGBs would be subject to decision of the Lending Bank and cannot be inferred as a matter of right.

Redemption linked to prevalent gold price

The sovereign gold bond is linked to the prevalent gold price. The redemption price of the sovereign gold bond will be 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.

Sovereign gold bond 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 4kgs every year in such bonds. For trusts, charitable institutions, the maximum limit is 20kgs.

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.

Multiple joint holders and nominees permitted:

The sovereign gold bond offers multiple 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 or internet banking are acceptable modes of payment for the sovereign gold bond scheme, India. However, cash is only accepted up to Rs. 20,000.

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