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.
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.
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.
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.
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.