How to buy sovereign gold bonds online with Zerodha? Do these bonds provide a good return for a long term period?
- Asked By
- Updated On:02-Apr-2024
- Replies:7
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.
To place bids on Sovereign Gold bonds online, you can follow these simple steps:
- Open your Kite app and login.
- Tap on Bids.
- Choose Government securities.
- Tap place bids.
- Type in the amount you want to place a bid for and simply click place bid.
Some important things to know when buying SGB from Zerodha:
- The buying process happens in the primary market itself.
- The time of allotment will be T+15 days after closure of scheme.
- After allotment they will appear on your holdings.
- SGBs that you purchase from market watch will show after T+2 days.
Buy Sovereign Gold Bonds with Zerodha
There are 2 ways to buy SGB from Zerodha-
- From the secondary Market (NSE)
- 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:
- Login to your Zerodha account using your ID & Password.
- Search SGB by typing SGB in the search box on the extreme left side.
- 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:
- Login into Coin and search for Sovereign Gold Bonds, or
- Just search Gold Bond Zerodha in any web browser and it will directly lead you to your Zerodha Coin account.
- Enter your Customer ID and login into "Coin" (which is a platform to buy Government securities and bonds.)
- 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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Discussion (6)
If you do not have gold in your portfolio then you are definitely missing out. Buying sovereign gold bonds through Zerodha is a great option. What's even more interesting is that once you buy them, they get listed in NSE where you can sell them at profits.
There is an option to buy sovern gold bond in zerodha console.
Yes! Even if you buy a SBG from the secondary market, you are entitled to the interest. If the Bond is of the February issue, the interest will be paid after 6 months from February which will be in August. So if you buy the SGB even in July, you will be entitled to the full half-yearly interest.
If I buy sovereign gold bond from secondary market, then will I get half yearly interest??
If we buy sgb from secondary market, will we receive half yearly interest ??
Gold is a great investment that acts as a store of value and also as a hedge from inflation. Investing in SGB is the best way to invest in Gold. You can buy these Bonds from Zerodha easily by following some simple steps.
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workforvansh9
Sovereign Gold bonds are an excellent way to invest in gold without security problems and paying making charges of physical gold. SGBs are definately worthy to be invested in!