Frequently Asked Questions

Sovereign Gold Bond Scheme

(Updated as on February 4, 2019)

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


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


3. Are there any risks in investing in SGBs?


4. Who is eligible to invest in the SGBs?


5. Whether joint holding will be allowed?

Yes, joint holding is allowed.

6. Can a Minor invest in SGB?

Yes. The application on behalf of the minor has to be made by his/her guardian.

7. Where can investors get the application form?

The application form will be provided by the issuing banks/SHCIL offices/designated Post Offices/agents. It can also be downloaded from the RBI’s website. Banks may also provide online application facility.

8. What are the Know-Your-Customer (KYC) norms?


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


10. What is the minimum and maximum limit for investment?


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


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


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


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


15. Who are the authorized agencies selling the SGBs?


16. If I apply, am I assured of allotment?


17. When will the customers be issued Holding Certificate?


18. Can I apply online?

Yes. A customer can apply online through the website of the listed scheduled commercial banks. The issue price of the Gold Bonds will be ₹ 50 per gram less than the nominal value to those investors applying online and the payment against the application is made through digital mode.

19. At what price the bonds are sold?


20. Will RBI publish the rate of gold applicable every day?


21. What will I get on redemption?


22. How will I get the redemption amount?

Both interest and redemption proceeds will be credited to the bank account furnished by the customer at the time of buying the bond.

23. What are the procedures involved during redemption?

  • The investor will be advised one month before maturity regarding the ensuing maturity of the bond.

  • On the date of maturity, the maturity proceeds will be credited to the bank account as per the details on record.

  • In case there are changes in any details, such as, account number, email ids, then the investor must intimate the bank/SHCIL/PO promptly.

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


25. What do I have to do if I want to exit my investment?


26. Can I gift the bonds to a relative or friend on some occasion?

The bond can be gifted/transferable to a relative/friend/anybody who fulfills the eligibility criteria (as mentioned at 4). The Bonds shall be transferable in accordance with the provisions of the Government Securities Act 2006 and the Government Securities Regulations 2007 before maturity by execution of an instrument of transfer which is available with the issuing agents.

27. Can I use these securities as collateral for loans?

Yes, these securities are eligible to be used as collateral for loans from banks, financial Institutions and Non-Banking Financial Companies (NBFC). The Loan to Value ratio will be the same as applicable to ordinary gold loan prescribed by RBI from time to time. Granting loan against SGBs would be subject to decision of the bank/financing agency, and cannot be inferred as a matter of right.

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


29. Is tax deducted at source (TDS) applicable on the bond?


30. Who will provide other customer services to the investors after issuance of the bonds?

The issuing banks/SHCIL offices/Post Offices/Designated stock exchanges/agents through which these securities have been purchased will provide other customer services such as change of address, early redemption, nomination, grievance redressal, transfer applications etc.

31. What are the payment options for investing in the Sovereign Gold Bonds?

Payment can be made through cash (upto ₹ 20000)/cheques/demand draft/electronic fund transfer.

32. Whether nomination facility is available for these investments?

Yes, nomination facility is available as per the provisions of the Government Securities Act 2006 and Government Securities Regulations, 2007. A nomination form is available along with Application form. 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:


  2. the interest and maturity proceeds of the investment shall not be repatriable.

33. Can I get the bonds in demat form?

Yes. The bonds can be held in demat account. A specific request for the same must be made in the application form itself.

Till the process of dematerialization is completed, the bonds will be held in RBI’s books. The facility for conversion to demat will also be available subsequent to allotment of the bond.

34. Can I trade these bonds?


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

The nominee/nominees to the bond may approach the respective Receiving Office with their claim. The claim of the nominee/nominees will be recognized in terms of the provision of the Government Securities Act, 2006 read with Chapter III of Government Securities Regulation, 2007. In the absence of nomination, claim of the executors or administrators of the deceased holder or claim of the holder of the succession certificate (issued under Part X of Indian Succession Act) may be submitted to the Receiving Offices/Depository. It may be noted that the above provisions are applicable in the case of a deceased minor investor also. The title of the bond in such cases too will pass to the person fulfilling the criteria laid down in Government Securities Act, 2006 and not necessarily to the Natural Guardian.

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

Yes, part holdings can be redeemed in multiples of one gm.

37. How do I contact RBI to address my queries regarding Sovereign Gold Bond ?

A dedicated e-mail has been created by the Reserve Bank of India to receive queries from members of public on Sovereign Gold Bonds. Investors can mail their queries to this email id.