How to buy Sovereign Gold Bond online with Zerodha?

Short Answer

Sovereign Gold Bonds can be bought from Zerodha either from the secondary market where it gets listed after 10-15 days of issue or from the primary market through "Coin" (Coin is a platform of Zerodha used for buying and selling government securities) at the time of issue. The minimum quantity is 1 gram or 1 unit of the SGB and the maximum is 4kg or 4000 units for an individual.

Detailed Answer

Sovereign Gold Bonds-

Buying SGB (Sovereign Gold Bond) is the best way to invest in gold and diversify your portfolio. Gold is also treated as a hedge against inflation hence having gold in your portfolio is considered an essential part of every investor's portfolio. Sovereign Gold bonds are backed by the Government of India hence the chances of default are next to impossible. These bonds also provide a 2.5% Interest on the face value of the bonds, credited into your account semi-annually.

Buying SGB is very simple and it can be bought online from Zerodha. You will also get a discount of Rs.50 per gram if you apply from any online method at the time of issue. You can buy SGB from the secondary market as well as it is listed on the stock exchanges after 10-15 days from the date of issue.

Buy Sovereign Gold Bonds with Zerodha

There are 2 ways to buy SGB from Zerodha-

  1. From the secondary Market (NSE)
  1. Directly the Primary Market at the time of Issue.

1. To apply for SGB through Zerodha from the Secondary market

The following steps can be followed to buy it from the secondary market:

  1. Login to your Zerodha account using your ID & Password.
  1. Search SGB by typing SGB in the search box on the extreme left side.
  1. Now choose from the results which tranche you want to buy from.

To find out which SGB to purchase, check the 'Month', 'Year of maturity', and the 'Series of the Bond' written in its name. Now you can choose from the results which series of SGB you want to buy from.

For Example in the Bond "SGBSEP28VI-GB" the First 3 letters "SGB" denotes its name "Sovereign Gold Bond"

the next 3 alphabets "SEP" denotes the month (September) on which it was issued. The following 2 numbers describe the year of maturity, "28" means that this bond will mature in "2028". The last two alphanumeric numbers describe the tranche of the bond "VI", in this case, describes that it was the 6th tranche of the year.

2. Apply for SGB through Zerodha from the Primary market:

  1. Login into Coin and search for Sovereign Gold Bonds, or
  1. Just search Gold Bond Zerodha in any web browser and it will directly lead you to your Zerodha Coin account.
  1. Enter your Customer ID and login into "Coin" (which is a platform to buy Government securities and bonds.)
  1. Enter the Quantity you wish to purchase and place your order.

By this method, you will be able to buy the SGB at the time of issue at the fixed issue price. The bonds will be credited into your Zerodha Account within 3 days and they will be listed on NSE(National Stock Exchange) within 10-15 days where you can sell them anytime if you want to.

If the SGB's are held till maturity then they will be exempt from any Capital Gains Tax.

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