A Comprehensive Guide on How to Purchase Sovereign Gold Bonds

how to purchase sovereign gold bond


Sovereign Gold Bonds (SGBs) provide an excellent investment opportunity for individuals looking to diversify their portfolios with gold. This article will serve as a comprehensive guide, offering step-by-step instructions on how to purchase these government-backed bonds.

Understanding Sovereign Gold Bonds 

Sovereign Gold Bonds are issued by the Reserve Bank of India (RBI) on behalf of the Government of India. They offer investors the chance to invest in gold without the hassle of physical ownership. SGBs are denominated in grams of gold, and their prices are linked to the prevailing market rate. They also provide an additional interest rate, making them an attractive long-term investment option.

Eligibility and Documentation 

To purchase Sovereign Gold Bonds, individuals must meet certain eligibility criteria. These include being a resident of India as defined under the Foreign Exchange Management Act (FEMA), 1999. Additionally, entities such as Hindu Undivided Families (HUFs), trusts, universities, and charitable institutions are also eligible to invest in SGBs. The necessary documentation typically includes proof of identity, address, and PAN (Permanent Account Number) card details.

Selecting the Right Channel 

Investors have the flexibility to choose from various channels for purchasing Sovereign Gold Bonds. These include commercial banks, designated post offices, and stock exchanges such as the National Stock Exchange (NSE) and Bombay Stock Exchange (BSE). Each channel has its own set of procedures, so it’s advisable to research and select the most convenient and reliable option based on individual preferences.

The Application Process 

To apply for Sovereign Gold Bonds, investors need to follow a straightforward application process. They can either apply online through the website of their chosen channel or fill out physical application forms. The forms require essential details such as personal information, bank account details for interest payments, and the amount of investment in grams of gold. The application can be submitted with the required documents and payment through a demand draft or electronic transfer.

Payment and Allotment 

Upon successful application, investors need to make the payment for the purchased SGBs within the specified time frame. The payment can be made through various modes such as cash, demand draft, or online transfer. Once the payment is received, the bonds are allotted to the investor, and a Certificate of Holding is issued. This certificate acts as proof of investment and can be used for future reference or redemption.

Redemption and Exit Options

Sovereign Gold Bonds have a tenure of eight years, with an option to exit after the fifth year. Investors have the choice to sell their bonds on stock exchanges if they wish to exit before maturity. Additionally, the bonds can be used as collateral for loans. Upon maturity, the investor receives the maturity amount based on the prevailing gold price. The amount is credited directly to the investor’s registered bank account.


Can I buy SGB every month?

SGBs are only intermittently available for purchase when the government releases it in tranches. The sale will be open for a week every month. Those who wish to buy at other times can buy earlier issues at market price.

How do I start investing in sovereign gold bonds?

To invest in sovereign gold bonds investors have to fill out an application form. The form is provided by the issuing banks or can be physically collected from the designated post offices. Investors can also download the form from the RBI website and fill it out.


Purchasing Sovereign Gold Bonds provides a secure and convenient way to invest in gold. By following the steps outlined in this guide, investors can take advantage of the attractive features offered by these bonds, including price appreciation, regular interest income, and easy exit options.

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