Sovereign Gold Bonds Eligibility

Discover the eligibility criteria for investing in Sovereign Gold Bond schemes.
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Sovereign Gold Bonds Eligibility
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2 min read
10 October 2023

Sovereign Gold Bonds (SGBs) are a popular and secure way for individuals to invest in gold without holding physical metal. Issued by the Government of India, these bonds offer the benefits of gold ownership in a digital or paper format, making them both convenient and safe.

If you are wondering how to invest in gold bonds, the process is straightforward. Eligible investors, including individuals, Hindu Undivided Families (HUFs), and trusts, can apply through banks, post offices, or online platforms. However, Sovereign Gold Bond eligibility is restricted to resident Indians only, meaning NRIs cannot invest in Sovereign Gold Bonds as per current RBI guidelines.

There are limits to how much one can invest. The SGB maximum limit for individuals is 4 kg per financial year, while trusts and similar entities can invest up to 20 kg. These caps are known as the Sovereign Gold Bond limit and help ensure balanced distribution.

For those looking into how to buy Sovereign Gold Bonds, the process involves KYC compliance using documents like PAN card, and choosing between primary issuance during RBI-notified windows or buying through secondary markets later.

Eligibility for Sovereign Gold Bond Scheme

Sovereign Gold Bonds (SGBs) are a safe, government-backed way to invest in gold digitally. For those wondering how to buy Sovereign Gold Bonds or how to invest in gold bonds, the process is simple and regulated. This scheme is ideal for individuals who prefer not to deal with physical gold and are looking for long-term, interest-earning investments.

Who can invest in SGBs?

  • Resident individuals
    Any resident Indian can invest in SGBs. Whether salaried or self-employed, you can add gold to your financial portfolio through this scheme. This meets the basic sovereign gold bond eligibility.
  • Hindu Undivided Families (HUFs)
    HUFs are eligible to invest in gold bonds, making it easier for family-managed finances to diversify holdings securely.
  • Trusts and charitable organisations
    Registered trusts and charitable institutions can participate in the scheme. It provides a stable option to invest in gold while earning fixed interest income.
  • Educational institutions and universities
    Recognised universities and educational bodies in India can invest in SGBs, helping them grow reserve funds securely.
  • Non-Resident Indians (NRIs)
    Can NRI invest in sovereign gold bonds? Currently, NRIs are not allowed to make fresh investments in SGBs. However, if an individual becomes an NRI after purchasing bonds as a resident, they can continue holding them till maturity.

Investment limits and other details

  • Minimum investment: 1 gram of gold.
  • SGB maximum limit: The maximum limit is 4 kg per financial year for individuals and Hindu Undivided Families (HUFs), and 20 kg for trusts and similar institutions under the sovereign gold bond limit guidelines.

Key features of SGBs

  • Fixed interest: Investors receive an annual interest of 2.50% on the initial investment, paid semi-annually.
  • Tenure: SGBs have an 8-year term with the option to exit after 5 years.
  • Tax benefits: Interest is taxable as per your slab, but capital gains on maturity are tax-exempt, offering a major advantage over physical gold investments.

Understanding how to invest in gold bonds and the associated benefits can help you make smarter, safer investment choices while staying within the prescribed limits of the scheme.

Additional read :Know all about Sovereign Gold Bond interest rates

How to buy sovereign gold bonds?

  • Visit an authorised channel: You can buy SGBs through banks, post offices, and recognised stock exchanges. Online platforms like internet banking and mobile apps are also available.
  • Choose the issuance window: The Reserve Bank of India issues Sovereign Gold Bonds in specific tranches during the year. Keep track of the scheduled windows to apply.
  • Fill in the application form: To invest, complete the application form online or offline. Basic details like name, address, and investment amount will be required.
  • Submit valid KYC documents: Provide identity proof such as PAN card and address proof to complete the Know Your Customer (KYC) process.
  • Investment and payment: SGBs are available in multiples of 1 gram of gold. Payments can be made via cash, cheque, or electronic transfer.
  • Know the eligibility: Only resident individuals, HUFs, and trusts can invest. NRIs are not eligible for Sovereign Gold Bonds under current regulations.

This method of investing helps you gain from gold’s price appreciation without the risks of storing physical gold.

Who is Eligible to Invest in a Sovereign Gold Bond Scheme?

To invest in gold bonds, individuals must meet the Sovereign Gold Bond (SGB) eligibility criteria defined by the Government of India. This investment option is ideal for those looking to add gold to their portfolio without holding it physically. Here are the key eligibility criteria:

  • Resident individuals: Anyone residing in India, including salaried and self-employed individuals, is eligible.
  • Hindu Undivided Families (HUFs): HUFs can invest and benefit from the SGB scheme.
  • Trusts, universities, and charitable institutions: These entities are also eligible under the sovereign gold bond eligibility norms.
  • NRIs: If you are wondering can NRIs invest in Sovereign Gold Bonds, the answer is no. NRIs are not allowed to invest in SGBs.

Knowing how to buy Sovereign Gold Bonds and how to invest in gold bonds is essential to start your investment journey.

Sovereign Gold Bond maximum limit for investment

The SGB maximum limit for investment is capped to ensure equitable access to all investors. The minimum amount you can invest is equivalent to 1 gram of gold. For individuals and HUFs, the maximum limit is 4 kg per financial year, while trusts can invest up to 20 kg. This limit applies to the total purchases, including bonds bought from secondary markets.

How to invest in gold bonds? You can invest in SGBs through banks, post offices, or online platforms during the issuance period. It's an attractive option for those looking to invest in gold but without the risk of theft or storage concerns associated with physical gold.

What is the maximum limit for buying Sovereign Gold Bonds?

The sovereign gold bond limit restricts how much gold you can invest in per financial year. For individuals and Hindu Undivided Families (HUFs), the cap is 4 kg of gold, while for trusts and similar entities, the limit is 20 kg. This limit applies to both primary market purchases and secondary market acquisitions. The bonds are denominated in multiples of 1 gram of gold, making it easier for investors to purchase small amounts.

Sovereign Gold Bond 2025 key features and benefits

Sovereign Gold Bonds (SGBs) continue to be a preferred gold investment in 2025 due to their safety, returns, and convenience. Here is why investors are increasingly choosing SGBs this year:

  • Government-backed investment: SGBs are issued by the Reserve Bank of India on behalf of the Government of India, offering high reliability.
  • Fixed interest income: Investors receive an annual fixed interest of 2.5% over and above the returns from gold price appreciation.
  • No storage worries: Since these bonds are in digital or certificate form, they eliminate the risks and costs of storing physical gold.
  • Tax benefits: Capital gains from redemption after the eight-year tenure are exempted from tax, making them more attractive than physical gold.
  • Ideal option for gold bond investors: If you are learning how to invest in gold bonds or looking for the best gold investment in 2025, SGBs are worth considering.

What are the tax benefits of investing in Sovereign Gold Bonds?

Investing in Sovereign Gold Bonds (SGB) offers several tax advantages. The most significant benefit is that no capital gains tax is applicable if the bonds are held until maturity, which is 8 years. Additionally, the annual interest earned on SGBs, which is 2.5%, is taxable under your income slab, but you can offset this with other deductions. Long-term capital gains (LTCG) tax at 20% with indexation benefits applies if you sell the bonds before maturity.

How to Buy Sovereign Gold Bonds? Purchase them online or through banks and post offices during the issue period.

Who cannot invest in a Sovereign Gold Bond scheme

  1. Minors: Individuals below the age of 18 years are not eligible to invest in sovereign Gold Bonds. They need to be of legal age and have the necessary documentation to invest in these bonds.

  2. Foreign entities and individuals: Foreign entities and individuals who are not residents of India cannot invest in sovereign Gold Bonds.

  3. Persons holding Power of Attorney (POA): Individuals holding Power of Attorney on behalf of someone else are generally not allowed to invest in SGBs. The investment needs to be made in the name of the actual investor, and the person holding the POA cannot invest on their behalf.

The eligibility to invest in sovereign Gold Bonds extends to resident individuals, HUFs, trusts, universities, educational institutions, charitable institutions, and NRIs. It is a regulated investment avenue that allows diverse entities to participate in the gold market and benefit from the potential price appreciation of gold over time.

Please note that the above information is based on the current guidelines and regulations. It is advisable to consult with a financial adviser or refer to the official notifications for the most up-to-date and accurate information.

Additionally, if you need a loan to cover some urgent expenses, you may look at the gold loan offered by Bajaj Finance. Benefit from low gold loan interest rates and receive the best value for a loan secured by your gold jewellery, with loan amounts ranging from Rs. 5,000 to Rs. 2 crore.

Visit the Bajaj Finance website to apply for a gold loan today.

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Frequently asked questions

What is the minimum and maximum amount to invest in the Sovereign Gold Bond?

The minimum investment amount for the Sovereign Gold Bond is 1 gram of gold, while there is no maximum limit for eligible investors. This provides you with the flexibility to invest according to their preferences and financial capacity.

Who is eligible to buy Multiple Sovereign Gold Bond (SGB)?

Residents of India, including individuals, Hindu Undivided Families (HUFs), trusts, universities, and charitable institutions, are eligible to buy multiple Sovereign Gold Bonds (SGBs). However, NRIs are not eligible to invest. The maximum limit is 4 kg per individual and 20 kg for trusts per financial year.

What will be the tenure of the Sovereign Gold Bond?

The tenure of Sovereign Gold Bonds (SGBs) typically ranges from 8 to 12 years, allowing you to choose a duration that suits your investment goals. This flexibility makes SGBs a convenient choice for long-term gold investment.

Can I sell my Sovereign Gold Bonds before maturity?

Yes, you can sell your Sovereign Gold Bonds before maturity. After the fifth year, SGBs can be redeemed on interest payment dates. Alternatively, you can trade them on the stock exchange anytime after listing. Early redemption may incur capital gains tax depending on the sale timing.

What is the minimum investment in Sovereign Gold Bonds?

The minimum investment in Sovereign Gold Bonds (SGB) is 1 gram of gold. Investors can buy in multiples of 1 gram, making it a flexible option for small-scale gold investment. The sovereign gold bond scheme is accessible to a wide range of investors.

What is the Sovereign Gold Bond maximum investment limit per year?

The SGB maximum limit for individuals and Hindu Undivided Families (HUFs) is 4 kg per financial year, while the sovereign gold bond limit for trusts and similar entities is 20 kg per year. This limit ensures equitable access for all investors.    

What are the eligibility criteria for investing in Sovereign Gold Bonds?

The sovereign gold bond eligibility criteria include being a resident of India, encompassing individuals, HUFs, trusts, universities, and charitable institutions. Investors must meet this requirement to participate in the Sovereign Gold Bond 2024 scheme.

Who is eligible under the Sovereign Gold Bond scheme?

Indian residents, including individuals, HUFs, charitable institutions, and trusts, are eligible under the sovereign gold bond scheme. This wide range of eligibility allows multiple groups to benefit from secure gold investments through SGBs.

Can NRIs invest in SGB?

No, NRIs are not eligible to invest in Sovereign Gold Bonds. The sovereign gold bond eligibility criteria only include resident Indians, HUFs, and certain institutions, ensuring that only domestic entities can participate in the scheme.