Sovereign Gold Bond, whenever I heard this name it made me curious what is sovereign stands for, what does it mean, how to invest in it. If you are also curious and want to know it, then stay tuned!!
Sovereign Bond is a plan that was begun under the Gold Monetization activity by the Government. The sovereign gold bonds are an amazing substitute of physical gold, you can invest in gold not in the physical form but in virtual form. There is no space for fraud as these bonds are issued by RBI, you will get the money in exchange of bonds once they get mature. In order to purchase these bonds, you have to pay the fixed amount to the SEBI registered Brokers.
There are many brokers who will have this service of Gold bond, among them Zerodha is the one who have this. This investment comes with a lesser risk as you will get the money on the market price. It doesn’t even involve gold making charges and purity of Gold.
Gold Bond Zerodha
You can buy the gold bonds from zerodha in very easy steps. Government will provide you the interest on per annum basis. At present it is 2.50% per annum. In order to buy sovereign Gold bonds, you just need a Demat account. If you have that then it is just a matter of 10 mins.
How to buy Sovereign Gold Bonds through Zerodha?.
You have to sign in utilizing your Kite certifications and enter the amount you wish to offer for. SGBs are recorded on the trade 10-15 days after the issue and can be exchanged on Kite. Do take note of that lone requests with Limit CNC orders are permitted because of illiquidity in the fragment
Gold Margin of Zerodha-
Zerodha Gold margin is describing the amount of investment you can do, the minimum amount of Gold you can buy is 1gram of Gold and the maximum investment of 4kg. For Gold Trading one needs to open an account for commodity.
Gold bond zerodha ETF
ETFs are mutual funds which are traded on stock exchanges like shares. ETF are listed in stock exchange and their units can bought and sell similarly like shares in the trading hours.
An ETF is a bin of stocks that mirrors the creation of an Index, as S&P CNX Nifty or BSE Sensex. It can contain numerous sorts of ventures, including stocks, products, bonds, or a blend of speculation types. This is not normal for shared assets, which are not exchanged on a trade, and exchanged just once every day after the business sectors closes.
Following are the types of ETF-
1. Index ETF- Index ETFs are exchange-traded funds that usually track nifty and sensex as closely as possible.
2. Bond ETF- Bond ETFs are those exchange traded funds which invest only on bonds.
3. Gold ETF- Gold ETF is those Exchange traded funds that gives option to invest on Golds and earn High Interest.
4. Liquid ETF- Liquid ETFs are funds which derives its value from money market securities
Gold ETF is the commodity ETF which will give an opportunity to investors to invest in ETFs.
Following are the benefits with Gold Bonds-
- Minimum Investment required in bonds are low.
- Liquidity are high in Gold Bonds
- From safety point of view also, gold bonds are safer.
- Gold bonds doesn’t cheat you on Purity. It’s always pure
- The cost charged for storage is also minimum.
How Gold ETF works
The purchasing and selling of ETFs is primarily done online progressively at the stock trade, through a broker. There is negligible cooperation among speculators and the reserve house. Just like a stock, and intraday value information can be effectively acquired over the span of the exchanging day. The amount of ETF issued and the redeem shares will decide the market Price of ETFs.
After Reading the article you must be wondering, what will be the steps to invest in the sovereign Gold bond Zerodha. I come up with the steps which will definitely help you to invest in the bonds directly through the app. Following are the steps to follow-
Step 1 – Login with kite
First step is to login in your Kite app, as it is discussed that you must have an online account on Zerodha Kite. The below picture will show you the platform where you can login into the app with your unique user ID and password.
Password- You have to put the password here which will help you to dig into the app and you can start investing You can see and read about the bonds and the interest which is written on the platform.
Step 3- Authorize
In this step you have to give the permission required by the app, so that it can work accordingly and smoothly as per your requirement.
Place order- This Step is all about placing an order, you have to write an amount you want to invest. It will ask you the quantity and show you the price of investment.
Confirmation- This step is all about the confirmation which you will get after placing an order. Hope you understand each and every steps,
Zerodha Gold Brokerage
The Table will show you the charges of brokerage-
|Commodity Account Opening Charge||INR 200|
|Brokerage Charge||INR 20 Per order|
|Annual Maintenance Charge||INR 0|
Sovereign Gold Bond Features
Following are the features of Sovereign Gold Bonds, which you must know about-
1. Eligibility Criteria
Any Indian Residential Can Invest in Sovereign Gold Bond, the main requirement is the demat account.
2. Minimum Investment
The minimum Investment which you have to made is at least 1 gm of Gold.
Being an Individual You can invest upto 4kg of gold and if you are from and trusts then you can invest 20kgs of Gold.
4.Interest on Sovereign Gold Bond
For each tenure Government will decide the interest and it will be paid semi annually, i.e in the span of every six months.
The Tenure of Sovereign Gold Bond is 8 years. You can redeem it after 5 years also, but the maturity is done at the 8th year only.
Sovereign Gold Bond Scheme for 20-21 Series
|Gold Bond Name||Subscription Date||Issue Date|
|SGB 20-21 Series III||8th-12th June 2020||16th June 2020|
|SGB 20-21 Series IV||6th -10th July 2020||14th July 2020|
|SGB 20-21 Series V||3rd-7th Aug 2020||11th Aug 2020|
|SGB 20-21 Series VI||31st – 4th Sep 2020||8th Sep 2020|
- Sovereign Gold Bond Scheme 20-21 Series-III will be start issue from June 8, 2020 to June 12, 2020. The Bonds will be finally issued on the June 16,2020. The Return on this gold bond is 2.50% in the span of 6 months i.e semi annually.
- Sovereign Gold Bond Scheme 20-21 Series-IV will be start issue from 6th -10th July 2020 . The Bonds will be finally issued on the 14th july 2020. The Return on this gold bond is 2.50% in the span of 6 months i.e semi annually.
- Sovereign Gold Bond Scheme 20-21 Series-V will be start issue from 3rd-7th Aug 2020 . The Bonds will be finally issued on the 11th Aug 2020 . The Return on this gold bond is 2.50% in the span of 6 months i.e semi annually.
- Sovereign Gold Bond Scheme 20-21 Series-VI will be start issue from 31st – 4th Sep 2020 . The Bonds will be finally issued on the 8th Sep 2020 . The Return on this gold bond is 2.50% in the span of 6 months i.e semi annually.
Advantages of Sovereign Gold Bond
- Biggest advantage of the Sovereign Gold Bond scheme is the fixed interest which the government had decided to give the investor irrespective of the fall and rise of the Gold Price. This interest is divided into two parts which is paid in the gap of 6 months to the respective holder.
- The other important advantage of Gold bond is that it is issued in the form of paper and it will have your name as a holder. As the Gold is not present in the physical format, so there is almost zero tension of safekeeping and you don’t have to pay for a locker as well.
- Sovereign Gold Bond scheme tax benefit is important too. No TDS is deducted from your investment on Sovereign Gold Bonds. It will not deduct any amount until you hold bonds till 8 years.
Disadvantages of Sovereign Gold Bond
The only disadvantage which I find with Sovereign Gold Bond is the maturity period which is for 8 years. It is difficult to hold such an amount for this long. You can break this tenure after 5 years of investment too.
When it comes to investment, we ever tried to choose the smart investment option. Gold Bonds are one of them as it involves lowest risk factor and liquidity is also high. If you want to invest in Gold Bonds, then Zerodha Sovereign Gold Bond is the best Option. All you need to have is Commodity Account. I hope you will get all the valuable information here regarding Sovereign gold bond Zerodha and how to invest in that and the right time to invest in Gold Bond.
Blog Image Source: Zerodha.com