Sovereign Gold Bond
Sovereign Gold Bonds are government securities denominated in grams of gold. They are substitutes for holding physical gold. Investors have to pay the issue price and the bonds will be redeemed on maturity. The Bond is issued by Reserve Bank on behalf of Government of India. Customers can purchase SGB from all BOI branches as well as through our Internet banking facility.

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ELIGIBILITY
- The Bonds will be available for sale to all Indian Resident individuals, HUFs, Trusts, Universities and Charitable Institutions.
- Note: ‘CC’ accounts shall not be allowed / populated for ‘Debit Account number’ and ‘Interest Credit account’ fields. NRI Customers are not permitted to invest in Sovereign Gold Bond.
TENURE
- The tenure of the Bond will be for a period of 8 years with exit option after 5th year to be exercised on the interest payment dates
QUANTITY
- Minimum permissible investment will be 1 gram of gold.
- The maximum limit of subscription shall be 4 KG for individual, 4 Kg for HUF and 20 Kg for trusts and similar entities per fiscal (April-March) notified by the Government from time to time
- The annual ceiling will include bonds subscribed under different tranches during initial issuance by Government and those purchased from the Secondary Market.
- The Bonds will be denominated in multiples of gram(s) of gold with a basic unit of 1 gram.
ISSUE PRICE
- Price of SGB is declared by RBI one day prior to launch.
- Price of Bond will be fixed in Indian Rupees on the basis of simple average of closing price of gold of 999 purity, published by the India Bullion and Jewellers Association Limited for the last 3 working days of the week preceding the subscription period.
- The issue price of the Gold Bonds will be Rs. 50 per gram less for those who subscribe online and pay through digital mode.
PAYMENT OPTION
- Payment for the Bonds can be made through cash payment (upto a maximum of 20,000)/ demand draft /cheque/ electronic banking.
PROTECTION OF INVESTMENT
- The quantity of gold for which the investor pays is protected, since he receives the ongoing market price at the time of redemption/ premature redemption.
NO STORAGE COST
- The risks and costs of storage are eliminated. The bonds are held in the books of the RBI or in demat form eliminating risk of loss.
ZERO HIDDEN CHARGES
- SGB is free from issues like making charges and purity in the case of gold in jewelry form.
ADDED INTEREST INCOME
- The Bonds bear interest at the rate of 2.50 per cent (fixed rate) per annum on the amount of initial investment. Interest will be credited semi-annually to the bank account of the investor and the last interest will be payable on maturity along with the principal.
EARLY REDEMPTION BENEFIT
- In case of premature redemption, investors can approach the concerned bank thirty days before the coupon payment date. Request for premature redemption can only be processed if the investor approaches the concerned bank at least one day before the coupon payment date. The proceeds will be credited to the customer’s bank account provided at the time of applying for the bond.
TAX BENEFITS
- The capital gains tax arising on redemption of SGB to an individual has been exempted. The indexation benefits will be provided to long terms capital gains arising to any person on transfer of bond. TDS is not applicable on the bond.
*Note : It is the responsibility of the bond holder to comply with the tax laws.
BUYING PROCEDURE
- For offline process you can download the form and visit your nearest branch along with your KYC documents.
- You can also buy directly using Bank of India Internet Banking BOI StarConnect and avail a discount of Rs 50/gm.
REDEMPTION ON MATURITY
- On maturity, the Gold Bonds shall be redeemed in Indian Rupees and the redemption price shall be based on simple average of closing price of gold of 999 purity of previous 3 business days from the date of repayment, published by the India Bullion and Jewelers Association Limited.
- Both interest and redemption proceeds will be credited to the bank account furnished by the customer at the time of buying the bond.
REDEMPTION BEFORE MATURITY
- Though the tenure of the bond is 8 years, early encashment/redemption of the bond is allowed after fifth year from the date of issue on coupon payment dates.
- The bond will be tradable on Exchanges, if held in Demat form. It can also be transferred to any other eligible investor.
- In case of premature redemption, investors can approach the concerned branch thirty days before the coupon payment date. The proceeds will be credited to the customer’s bank account provided at the time of applying for the bond.