Is Demat account required for sovereign gold bond?
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- Updated On:06-Oct-2022
- Replies:1
Short Answer
No, you don't need a demat account to buy Sovereign Gold Bond. SGBs can be purchased through banks or online marketplaces. The clients without demat accounts will receive physical and e-certificates for the holdings.
Detailed Answer
A Sovereign Gold Bond (SGB) is a non-physical form of investing in gold. These bonds are issued by the RBI on behalf of the government and allow individuals to invest in gold without the worry of actual asset storage.
The minimum permissible investment for these bonds is 1 gram of gold. For individuals and Hindu Undivided families, the maximum limit of subscription is 4 KG, and for trusts and other similar entities, the maximum limit is 20 KG.
Is Demat account required for Sovereign Gold Bond?
No, the demat account is not at all required for a Sovereign Gold Bond. A demat account is necessary only if one wants to invest in stocks and other securities.
One can purchase SGBs through a bank or a post office, and you'll receive a Certificate of Holding on the day the SGBs are issued. The issuing agents will give the certificate that will be a physical certificate if the bonds are purchased offline, otherwise, an e-certificate will be issued for the same.
Why people prefer buying SGB through demat account than banks?
People prefer to buy SGB using a demat account because it enables you to buy SGB directly from the stock market, providing you with the flexibility to enter and exit the market as needed. In addition, there is no need for the burdensome paperwork that accompanies during bank transactions.
Buying Sovereign Gold Bond
There is no need of demat account for buying Sovereign Gold Bonds. However, using a demat account to purchase SGB offers a little more flexibility and convenience. But, it also carries additional fees and taxes if sold before maturity.
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Discussion (0)
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.
Sovereign Gold bonds is one of the most promising investments that can be made by people. The certificate of SCB is accessible though all the official agencies or agents and directly it is accessible from RBI via emails.
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.
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